Getting A Personal Loan In The UK
When one borrows a fixed amount of money over a fixed term, it is known as a personal loan. Personal loans frequently feature a fixed rate of interest. Typically, repayments are made monthly and repayment terms span several years. In most cases, the monthly repayment is the same for each month.
Personal loans are a variety of unsecured loans. They do not require collateral. This implies that when sanctioning the loan, the lenders will conduct a deeper assessment of your financial situation and credit rating. But they will not secure the loan based on your vehicle or property.
In the case of personal loans, the best market rates are frequently reserved for entities that have excellent credit ratings. They get access to the lowest APR loans UK.
Even while an individual has a bad credit rating, he can still get a personal loan. But the APRs are going to be high in all likelihood.
How is a personal loan different from short term loans?
Let us suppose that you borrow money from a lender when you need money now UK. When you repay the money in a matter of 3 or 4 months, it is a personal loan. Technically, the unsecured loans are known as personal loans.
People frequently associate personal loans with a larger sum of money. They believe that personal loans are long term loans. Short term loans are different, and as suggested by the name, need to be paid back quicker. The latter correspondingly involve smaller loan amounts.
Application processes for either, short term loans and personal loans have similarities. A borrower’s suitability for a loan is decided upon by a lender by running through his financial details and credit history.
Should I go for a personal loan?
If you need emergency money now UK, fast, a personal loan is the right option for you. Another case wherein people frequently prefer to go for a personal loan is when they are denied credit cards, have an emergency bill payment to make or need to make an important purchase. With online personal loans, one gets access to cash quickly. When you need to pay off debts quickly, a personal loan is the right option to go ahead with.
Will a bad credit rating deter me from getting a personal loan?
Quick loans bad credit UK is going to be relatively difficult to get approved. But still, numerous lenders across the UK will be willing to consider your application when you are looking to get a personal loan for a bad credit score.
This never used to be the case earlier. A borrower with a bad credit score then had limited options for borrowing money at his disposal. Such borrowers now have more options for borrowing money.
When borrowers nowadays look to get a personal loan for a bad credit score, lenders consider their ability to pay back the loan as the primary factor. The credit score is secondary.
Lenders consider numerous applicants for a personal loan. It does not matter if they have missed multiple payments in the past, have received a CCJ, or have been declared bankrupt.
Moreover, the borrowers are not required to wait to get a decision over their applications. The applications are instead processed instantaneously. Borrowers with a very bad credit score can also apply. A few of the personal loans are devised by lenders especially for the people who have a bad credit score.
Is a lender going to check my credit score when I apply for a personal loan?
Direct lenders of personal loans operate in the same way as any other lenders. They have legal and ethical obligations to abide by, and necessarily conduct a credit search over your records, before they sanction a loan for you. They are bound by the Financial Conduct Authority (FCA) to do so.
Why contact a broker for getting a personal loan?
When you contact a broker for getting a personal loan, he will match you with lenders who will perform a soft search over your records when you apply for a loan. This does not affect your credit score.
The lenders will perform a full credit search only when they offer a loan and you accept it.