Personal Loans Guide

Personal Loans Guide

Welcome to the Personal Loans Guide

A personal loan is simply a way of borrowing money that you’re required to pay back over an agreed period with interest. Knowing where to get the best deal can be difficult, so we’ll compare a broad range of personal loans from across the market to find the right fit for you.

Personal loans are usually unsecured, which means you’re not putting your valuable possessions, such as your home or car, up as security or collateral against the debt. But this limits how much you can borrow – it’s typically up to about £25,000.

Table of Contents

FAQ about Personal Loans

What is a Personal Loan?

Personal Loans Guide

A Personal Loan lets you borrow an amount of money from a lender over an agreed period (or term). The amount you borrow, plus interest, is typically paid back in fixed monthly instalments.

You can use a personal loan to pay for any wedding expenses:

  • Rings
  • Venue
  • Catering
  • Honeymoon
  • Decorations
  • Entertainment
  • Photographer
  • Invitations
  • Hair and makeup
  • Wedding dress and tuxedo
  • Travel for destination weddings

Many personal loan lenders rebrand their general-purpose personal loans into specific uses, even though they’re all the same thing.

Best Personal Loans

If you’ve done the work and figured out that a personal loan makes sense for you, there’s no shortage of options to choose from. There are thousands of personal loan lenders out there, we break down a few of the best personal loans to choose from.

 

Best Personal Loans for Low Rates

Loan.co.uk

Personal Loans Guide, Services and Products from Loan co.uk

Check Your Rate

  • Loan Amounts £1000 – £30,000
  • Loan Terms from 3 to 18 months
  • No Minimum Credit Score

About Loan.co.uk

An award winning, UK based loans and mortgages fintech, we have helped 1,000’s of people to consolidate their debt and fund home improvements, weddings and other life changing purchases. We have also helped 1000’s people to consolidate their over expensive debt. We are rated 4.97 out of 5 on Reviews.co.uk from more than 1650 reviewers. We provide completely free, no obligation quotes after searching our extensive panel of lenders with 1000’s of secured loans products from across the market using the most advanced technology in the country. Loan.co.uk is a credit broker not a lender. Loan.co.uk is authorised and regulated by the Financial Conduct Authority, FCA reg number 718486.

At Loan.co.uk, a senior leadership team with over a 100 years’ experience in digital loan acquisition and fulfilment, merges cutting edge proprietary technology, with a simple consumer brand and a team of the most helpful, experienced and professional employees in the country, on a mission to simplify the way UK consumers borrow money forever. We believe our fusion of hard working, talented people and forward-thinking technology can help you.

What makes us different.

  1. We pay for everything –  Credit searches, valuations, legal searches, third party references. We cover the cost of everything.
  2. Our client fees are up to 60% cheaper than our homeowner loan competitors.
  3. Market leading technology. We continue to invest millions of pounds in our technology to make the client experience simple, transparent and hassle-free.
  4. We will work with you to understand how we can be successful together, helping our mutual clients obtain the money they need, while generating income for your business.

Calculate A Personal Loan

 

Best Personal Loans for Bad Credit

PostOffice.co.uk

Personal Loans Guide, Services and Products from Post Office Personal Loans

Check Your Rate

  • Loan Amounts £1,000 – £50,000
  • Loan Terms 12 – 84 months
  • APR Range 8.49% – 35.97%
  • No Minimum Credit Score

About Post Office Personal Loans

At Post Office®, we aspire to be at the very heart of customers’ choice by becoming the most trusted provider of essential services to every person in the land.

We’re the UK’s largest retail network and the largest financial services chain in the UK with more branches than all of the UK’s banks and building societies put together. We also have growing direct channels such as contact centres and online – meaning we’re there for more customers, in more ways.

Post Office® and its partners offer over 170 products under four product pillars:

• Financial Services

• Mails & Retail (not currently available on the affiliate program)

• Government Services (not currently available on the affiliate program)

The Post Office® is now more than it ever was – an independent multi-channel business, with a vibrant, fast-growing financial services business, separated from Royal Mail and embarking on a new era of growth, modernisation and customer excellence in serving the UK population.

We have the largest retail network in the UK with almost 11,800 branches. And we want to grow further: we are a multi-channel business providing more than 170 products and services to our customers but our vision is to deliver more. Our financial services business, for instance, is one of the fastest growing in the UK, with almost 3 million customers, a growing mortgage business and a current account being piloted in 2013. The Post Office®, trusted and part of the fabric of our society, is an increasingly credible alternative to the high street banks.

Choose a loan between £1,000 and £25,000 with fixed monthly repayments.Post Office Money® Personal Loans are provided by Bank of Ireland (UK)

Calculate a Personal Loan

 

Best Personal Loans for Small Loans

AA Loans

  • Loan Amounts £1,000 – £40,000
  • Loan Terms 12 – 60 months
  • APR Range 8.05% – 36.00%
  • No Minimum Credit Score

About The AA Loans

AA Loans offer unsecured personal loans, they can be used for debt consolidation, car, home improvements etc. The rate is currently 3.3% (from 23rd June 2020) and is provided by Bank of Ireland UK.

USPs

  • Fixed monthly repayments for the duration of the loan
  • Spread the repayments over 1-7 years
  • No arrangement or set up fee
  • Other Loan amounts and terms available. Loan amounts range from £1,000 to £25,000, with terms available from 1-7 years.

To apply for an AA Loan applicants must:

  • Have been a UK resident for at least 3 years
  • Be over 21 and no older than 70 when the loan term ends
  • Have a regular (minimum) annual income of £12,000 (gross). If you are self- employed you must have been employed for a minimum of 2 years
  • Have a UK based bank or building society current account that can pay direct debits
  • Ensure that they can meet the repayments, as missed payments incur a charge and could have severe consequences on their ability to obtain future credit

Calculate a Personal Loan

 

Best Personal Loans for Fast Funding

MasterLoan.co.uk

Personal Loans Guide, Services and Products from Master Loan Company

Check Your Rate

  • Loan Amounts £2,000 – £36,500
  • Loan Terms 12 – 72 months
  • APR Range 7.99% – 35.99%
  • No Minimum Credit Score

About MasterLoan.co.uk

Masterloan.co.uk compare 100’s of different loan plans, no matter where you are in the UK. Our dedicated home loans team will search and find the best solution for you and at all times we will keep you informed of you home loan application. We offer homeowners and business owners loans and mortgages and offer loans from £1,000 up to £2.5 Million with fast market leading completions.

Best Personal Loans for No Fees

Quick Car Finance

Personal Loans Guide - Loans Website Directory

 

 

 

 

 

Check Your Rate

  • Loan Amounts £5,000 – £100,000
  • Loan Terms 12 – 84 months
  • APR Range 8.99% – 23.43%
  • No Minimum Credit Score

About ComparetheMarket.com

ComparetheMarket.com is a leading online platform that offers a wide range of financial products and services. With a mission to empower individuals with the knowledge and tools to make informed financial decisions, comparethemarket.com has become a go-to destination for those seeking various insurance products, financial services, and more.

Why customers choose Quick Car Finance??

      • Best Car Finance Deals £4,000 – £25,000+
      • Used By 500,000+ People Last Year
      • High Acceptance Rate & Poor Credit Considered
      • Email creatives available upon request
      • 100% Free & No Commitment
      • Super Fast & Easy Application
      • Over 250,000 vehicles to choose from

  • Advantages and Disadvantages of Personal Loans

    Personal Loans Guide

    If you’re thinking of taking out a personal loan, here are some pros and cons to weigh up first.

     

    Benefits of a Personal Loan:

    • You can use the money for whatever you like – you could pay for home improvements, a wedding or a car, for example. You’re not tied to a specific purpose, unlike with car finance.
    • Flexible terms – you can choose how much you want to borrow and how long you’d like to repay it. However, this does depend on your credit score and will affect the amount of interest you’ll have to pay.
    • Fixed interest rates and repayments – with personal loans, interest rates are usually fixed, unlike credit cards. And you’ll repay a fixed amount every month, which makes it easier to budget.
    • Debt consolidation – consider paying off multiple debts with one loan. A single repayment plan could make your debt more manageable by combining multiple monthly payments into one. You may be able to secure a better interest rate too. But bear in mind that extending the length of your loan means you may pay more in the long run.
    • Apply and receive the money quickly – you can often apply online and, if you’re approved, the lender will usually deposit the money into your account within a few days (or even a few hours if you’re already a customer).

    Drawbacks of a Personal loan:

    Higher interest rate than some alternatives – personal loans tend to have higher interest rates than loans secured against an asset. So, if you’re looking for cheap loans, this might not be the best option.

    Some credit card providers also offer interest-free deals for an introductory period, making them a potentially cheaper option than a personal loan.

    • Long-term commitment – if your income changes after taking out the loan, you might struggle to keep up with your repayments.
    • Good credit score needed for the best rates – the interest rate advertised may not be the rate you’re offered (unless it’s a guaranteed rate). A poor credit score makes it difficult to qualify for the best personal loans.
    • Penalties if you default – if you fail to make your repayments on time, this will damage your credit score. Your lender may even take legal action to settle unpaid debts.

What details do I need to get a Personal Loan Quote?

Personal Loans Guide

When you use our eligibility checker, we’ll show you a list of personal loans you might qualify for.

Once you’ve chosen a personal loan, you’ll be taken to the lender’s site to apply. You’ll need to have details including:

  • All the addresses you’ve lived at for the past three years
  • Your email address
  • Your employer’s details, including their address and phone number
  • Details of your monthly income and outgoings
  • Your bank or building society account details.

This helps the lender assess whether you’ll be able to make the loan repayments.

What are the Alternatives to Personal Loans?

Personal Loans Guide

There are five main alternatives to personal loans:

Secured loan

If you’re having trouble getting accepted for a personal loan or you’re looking to borrow more than £25,000, you could try applying for a secured loan. This type of loan is also known as a homeowner loan.

You’ll need to offer an asset such as your home or car as collateral. This could be recovered by the lender if you fail to make the repayments.

Because secured loans are less risky for lenders, they tend to offer:

  • Lower interest rates
  • Longer terms
  • Higher borrowing limits.

Credit cards

If you’re looking to borrow a small amount, a 0% interest credit card could be a useful alternative to a personal loan.

Make sure you can afford to keep up with the minimum monthly repayments and ideally repay the full amount before your 0% period ends.

Overdraft facility

If you only need to borrow a small amount of money for a very short time, consider using an interest-free overdraft, if you have one. If you don’t, it could be worth looking at alternative current accounts that offer this facility.

Peer-to-peer personal loan

Peer-to-peer (P2P) loans work in a similar way to standard personal loans. The difference is you borrow money from another person or group of people, instead of a bank or building society.

You can find P2P lenders on dedicated websites. Interest rates vary and can be affected by your credit score. However, P2P lending can sometimes offer lower interest rates compared to traditional lenders.

Car Finance

Car finance helps people buy a car that they couldn’t normally pay for up front. You’ll typically pay a deposit, followed by monthly repayments (with interest) over a fixed term. This could be from two years up to five years.

There are several different types of car finance available:

  • Hire Purchase (HP) – your loan will be secured against the car, and you’ll split its cost into monthly repayments. Once you’ve made the last repayment, the car will be yours to keep.
  • Personal Contract Purchase (PCP) – this type of agreement is based on the amount of value the car will lose during the loan term (its depreciation) rather than its total value. At the end of the agreement, you can hand the car back, buy it by paying a one-off balloon payment, or use any positive equity as a deposit in a new loan.

FAQ about Personal Loans

Personal Loans Guide

How Much do Personal Loans cost?

The cost of a personal loan depends on how much you want to borrow, the APR and how long you take to pay back the money.

Interest rates vary according to the size and length of the loan. A longer loan term may attract lower rates, but the overall cost will be higher than a short-term loan. And borrowers with poor credit scores will be charged higher interest rates.

What happens if I miss a personal loan repayment?

If you miss a loan repayment, the lender may add extra charges and interest to your loan. Missed payments will also be noted on your credit report, which could harm your credit score and make it harder for you to borrow in the future.

If you think you’re going to miss a payment, contact your lender. The sooner you discuss your options, the more flexible the lender may be.

Do I need a good credit score to get a personal loan?/h2>

You may be able to get a personal loan with bad credit, but it will affect how much you can borrow and the amount of interest you’ll be charged.

The better your credit score, the better terms you’ll be offered for a personal loan because the lender will be more confident you’ll be able to repay it.

Can you be pre-approved for a personal loan?

Yes, you can be pre-approved for a personal loan. Pre-approval means your loan application will be accepted based on the information you’ve provided. The interest rate, loan amount and term length will all be guaranteed, pending final checks from the lender. Put simply, it’s a ‘what you see is what you get’ deal.

How long will it take to get my money?

With some lenders, you can get your money on the same day as your application if you already hold an account with them. But you can normally expect to get your money within a week.

What can I do if I need to borrow more than they’ll lend?

If you need to borrow more than the lender is willing to offer you, or you need more than the typical £25,000 limit, consider a secured loan. You can borrow £100,000 or even more with a secured loan, but you’ll need to offer something of value as collateral, like your home.

Think carefully before taking out this type of loan. If you miss repayments, the lender can seize the asset you put up as collateral to repay what you owe.

What happens if I can’t repay my loan?

If you’re struggling to repay your loan, contact your lender as soon as possible. They may be able to support you with managing your repayments. Alternatively, contact a debt advice service. They’ll be able to help you organise a debt repayment plan with your lender.

If you can’t reach a compromise with your lender, you’ll probably be charged penalty fees for partial, late or missed repayments.

Can I repay my loan early?

You can pay off your personal loan early, but you might have to pay an early repayment charge (ERC). Early repayment charges vary, but you can usually expect to pay the equivalent of one to two months’ interest.

What will happen if UK interest rates change?

If your personal loan has a fixed interest rate, it won’t be affected if UK interest rates change. Your monthly repayments should remain the same, regardless of what happens to the Bank of England base rate.

Calculate a Personal Loan