How to apply for a loan

You can apply for a loan online, by phone, by post or in branch, depending on the lender. Here's how the loan application process works and what you need to do.

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What do you need to apply for a loan?

Here's a loan documentation checklist that includes the main things you'll need to provide when you apply for a loan:

  • Bank details

  • Current address, and previous addresses for the past 3 years

  • Employment details

  • Personal details e.g. date of birth

In addition to the physical paperwork you need, there are other eligibility criteria to fulfil. These may include:

  • Having an excellent credit score

  • Having an up to date credit file. Any mistakes or discrepancies could stop a lender from approving your application

  • Being at least 18 years old, or 21 depending on the type of loan

  • Being in full-time employment and meeting the minimum income requirement

What are eligibility criteria for a loan?

Eligibility criteria are the lending conditions you need to meet when applying for a loan.

Lenders usually have certain rules about how much borrowers need to earn, how old they have to be and the state of their credit record.

It's unlikely you'll be approved for a loan if you do not meet a lender's eligibility criteria.

The loan application process

You can apply for a loan online, by phone, by post or in person at your local bank branch. Not all lenders offer every option, so be sure to check first.

When applying for a loan online, check the URL starts with https:// in your browser. This means the website is fully secure and all your personal information is being encrypted. Whichever way you apply for a loan, the process is roughly the same. It will most likely be in the following order:

  • You complete an application form including information about the loan and your personal and employment details. This also gives the lender permission to run a credit check.

  • The lender runs a credit check to assess how risky it would be to lend to you. They'll also check fraud lists and confirm your address details.

  • The lender makes their decision on whether or not to lend to you and at what rate. It may not be at the representative APR rate advertised.

  • You accept their offer...or reject it.

Get a quote before you apply for a loan

To determine what rate you would have to pay on a loan, some lenders do a soft credit check before you send the full loan application. It's sometimes known as a 'soft quote'.

You still have to give all your personal details, but the lender search does not leave a mark on your credit record.

You need to prove your income to get a loan

As part of your loan application, you have to include your salary and monthly earnings.

Check which income sources are acceptable before you apply. Examples of incomes that may be excluded are:

  • Benefit payments e.g. child benefit, income support or housing benefit

  • Business profits (if applying for a personal loan)

  • Reimbursement for expenses

  • Maintenance payments from an ex spouse or partner

  • Non-guaranteed bonuses or sales commission

  • Overseas income e.g. from holiday lets abroad

  • Rental income from any buy-to-let properties you own

  • Student loans

You need to be able to prove any additional income in your loan application. You can do this by supplying recent bank statements or payslips showing your earnings. The lender will ask for what they need from you, so be ready!

Can I get a loan if I'm self-employed?

If you are self-employed, you usually need to have at least one full year of audited accounts to apply for a loan. Some lenders may ask for more and some may exclude self-employed earnings altogether. Always check before you apply to reduce the chance of being rejected.

What happens after you apply for a loan?

If you've been approved for the loan and you accept the loan offer, you'll need to sign the loan agreement. It can be sent to you electronically or in the post.

After the lender has received the signed agreement, they'll transfer the loan directly to your bank account. This can take anything from a few hours to a few days.

Once you have the money, your first payment will normally be due the following month, unless you have chosen to take a payment holiday.

Find out more about how to manage your loan.

My loan was declined, when can I apply again?

If your application has been turned down, you should:

  • Ask the lender to explain why

  • Double check your credit report for any mistakes

  • Hold off making any other loan applications for at least 3 months

Read more about what should you do if your credit application is declined?

Can you apply for two loans at the same time?

Although it's possible to apply for two loans at once, doing so is rarely advisable. That's because for each application, the provider does a hard credit check, which is marked on your credit report.

Making several applications for a loan can make you look like you are desperate for credit, which can be a sign of financial troubles. It will also hurt your credit score and make it harder for you to be accepted for credit in the future.

Read more about why you credit record matters

Applying for a loan FAQs

Yes, but it could seriously damage your credit record. Applying for more than one loan at the same time may make you appear desperate for credit, and like an unreliable investment. This could further hinder your chances of getting a loan or another credit product in the future.

You must be over 18 years old to apply for any loan. However, some lenders set further age restrictions, so check for these before you apply.

Not necessarily. You may just need to show that you can afford to pay your loan back, which is usually done by showing you have a stable income.

No, most loans are still available if you are not a homeowner. It's only homeowner loans that require you to own a property.

Need a loan? Compare loan lenders side by side to find one that is cheap to pay back, lets you borrow what you need and has repayments you can afford.