A Guide to Unsecured Personal Loans
Unsecured personal loans are offered by lending institutions such as banks
and building societies. Personal loans are not available for business purposes
and some other uses may also be excluded, for example the purchase of timeshare
properties. Below is a quick and easy guide to personal loans.
Unsecured personal loans are available for a range of different amounts
and repayment terms. They are not secured against property or other assets.
The repayment term available may depend on the purpose for which you require
the loan, and may be restricted accordingly (e.g Loans for holidays may
be restricted to a 12 or 24 month term). The amount available usually ranges
from £500 to £25,000 over a term of 6 months to 10 years. This
will vary between lenders and products. The amount borrowed is subject to
an interest charge, which will be quoted as a percentage. This rate is known
as the Annual Percentage Rate (A.P.R). As a general guide, it is advisable
to compare the A.P.Rs of different products as this will help you to determine
how competitive they are.
The way lenders quote personal loan interest rates varies. A fixed interest
rate will stay the same throughout the term of your loan, regardless of
any changes in the bank base rate. If the rate offered is a variable rate,
it may rise or fall in line with any base rate changes during the term.
When lenders quote their APRs they will state whether these are "typical" or whether they are set at one rate for all successful applicants, regardless
of the risk they present. The typical rate is a rate that is offered to
over 50% of successful applicants, and the exact rate offered to you will
depend on your personal circumstances, the amount and term of the personal
loan along with the credit assessment procedures.
Personal loans are repayable monthly. The lender may permit over-payments
and lump sum payments, which allow you to clear the loan over a shorter
term than that agreed at the outset. It is important to remember that some
lenders will charge you a penalty for repaying your loan early - this can
be up to 2 month's interest. Lenders may offer "payment breaks"
or "repayment holidays" as part of their personal loan package
and these allow you to take a break from your repayments at the beginning
of the loan or at any agreed point during the term. Interest may still accrue
on the balance outstanding so the exact terms should always be verified
with the lender.
Click here to compare unsecured personal loans and to apply online.
Click here to apply for a secured homeowner loan online
Lending institutions offer you the option of applying for your personal
loan either in person at a branch, via a written application, over the telephone
or online. In many cases, lenders offer different rates depending on the
method by which you apply i.e the rates for telephone applications may be
different from those for online applications. Assessments are generally
made very quickly based on your personal circumstances. These are often
referred to as credit scoring facilities. Credit scoring assesses your personal
circumstances and statistics to ascertain which broad category of borrower
you fit in to. Lenders will also use credit reference agencies to obtain
information about you. They provide a detailed analysis of your financial
position. In particular, they provide details of county court judgements,
defaults and any existing credit agreements, along with information relating
to the electoral roll and your past credit history. If you are refused a
personal loan or wish to make enquiries concerning your own credit file,
you can apply to the credit reference agencies for a copy of your credit
file. This service is subject to a small fee, and is available by contacting:
Experian Ltd
Online: www.uk.experian.com/consumer
Telephone: 0870 241 6212
Post: Consumer Service Help Centre
Experian Ltd
PO BOX 8000
Nottingham
NG1 5GX
Equifax PLC
Online: www.equifax.co.uk
Telephone: 0870 010 0583
Post: Credit File Advice Centre
PO BOX 3001
Glasgow
G81 2DT
If you are experiencing problems with your credit you may wish to uset
the following service for some help and advice.
Debt Management
Personal loans are governed by the Consumer Credit Act 1974. The Act contains
strict regulations about how money is lent and covers unsecured loans
up to £25,000. These are known as regulated loans. When taking out
a personal loan you will be asked to sign a credit agreement, which you
should read carefully before you sign as you will be bound by it's terms.
Lenders offer insurance policies or payment protection schemes to protect
you in the event of accident, illness, unemployment and death (subject
to conditions), for which the charge is added to your monthly repayment.
The cover and cost does vary between lenders and you should check what
their policy includes, and just as importantly, what it excludes.
If you are considering protecting your repayments in the event of accident,
sickness, unemployment or death, why not browse our Income Protection
finder.
If you do have difficulty making your repayments you should seek advice
from your lender immediately. The earlier you contact them, the more sympathetic
they are likely to be. You can also seek advice from a voluntary organisation
such as The Citizens Advice Bureau.
This site provides you with the facility to apply online for your personal
loan. You'll notice that many of the most competitive products in the
market place today (including those on our Best Buy tables) are available
to you through our application process. Providing the product has a red
apply icon, you can submit your application without leaving our site.
This will ultimately save you time, as it means you won't need to contact
service providers direct. We also hold the details of loans designed specifically
for applicants with a poor credit history, and we provide the facility
to apply online for these through this site.
When you apply through this site you will either complete a short application
form via our secure server, be re-directed to the service provider's website
to enable you to follow their own application process or you will be asked
to submit your details for a member of our Sales Support Team to contact
you. Once your application has been submitted to us, either this site
or the service provider will send you an e-mail acknowledging your application.
If you completed our application form, it will be passed to your chosen
provider in order that they may process it.
You will be kept up-to-date on the progress of your application by e-mail.
If for any reason your application is declined, we may be able to direct
your application to a provider who can help. We have a Support Team who
can be contacted by telephone should you require any further assistance
along the way.
All of your personal information is secure with this site. Our site is
protected by BT Trustwise encryption which provides a secure communication
between our website and the visitors to it. Confidential information is
passed to us via a secure server only.
Any information you provide is submitted to your chosen service provider
in encrypted format to ensure security and privacy at all times.
Please note, This site does not charge a fee for the service it provides.
Our income comes from the providers, who pay us a fee when you complete
your purchase. We recommend that you read the guides available throughout
the site for more information on the type of product you are interested
in. You should also take time to read our Terms and Conditions, and in
any case you should do so before using any of the services provided by
this site.
Click here to apply for a secured homeowner
loan online
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