Good or bad credit? Certain financial institutions have made it possible to qualify for a personal loan despite your credit rating.
To date, personal loan pricing is particularly advantageous for amounts ranging from £7,500 to £15,000 and even up to £25,000 in some circumstances. Consequently, if you want to borrow to finance larger expenses, like buying a new vehicle, renovating a house, going on vacation or getting married, seeking the most affordable personal loan possible is an innovative and affordable solution.
What’s the benefit of this kind of loan?
According to our research in September 2022, the top APRs offered for personal loans worth £7500 to £15,000 typically begin at 3.10%.
“It’s important to note that although personal loan costs may have recently risen due to an increase in interest rates, they are still relatively low when considering historical trends,” said Arnold Reyes, financial advisor at LBG Financial Services. “It’s worth mentioning that the interest rates for personal loans are fixed for the duration of the loan.”
However, it is crucial to emphasize that the shown APR will not automatically be what you will get when applying; we will discuss this issue later.
Also, moneylenders tend to take a selective approach regarding the applicants they consider and are not bound to provide you with funds.
What other information is relevant?
After approval, loan payments normally arrive in your bank account on the next business day or within 24 hours if you currently have a checking account at this lending bank or if proper procedures have been adopted.
“Once a loan has been approved, the funds are typically deposited into the borrower’s bank account within one business day,” said Reyes. “If the borrower has a checking account with the lending bank or if all necessary procedures have been properly followed.”
Most providers will waive payment during the year, usually by one month and occasionally by two. An official application will be required, and you are expected to meet the requirements (e.g., by paying on time).
If you feel the loan can be paid off in full early, feel free to prepay, although many prime offers have a prepayment fee of one or two months of interest. However, prepayment, whether a one-time fixed fee or a small additional monthly charge, is usually free.
The General Requirements of each lender can be found on their website ( it may be a PDF download ). If they don’t have everything you need, give them a call and talk to an agent.
Which are the suitable personal loans to consider?
If you’re looking to get funds within that borrowing limit, which are the leading personal loans out there?
To make it easier, we’ve compared the potentially best loans for your situation by classifying the main providers based on representative annual percentage rates and applicable loan terms.
Factors considered include prepayment fees, late or no payment fees (see below), and other distinguishing characteristics that would differentiate one lender from another.
Consider these key elements before jumping in, even though:
- Most likely, the APR shown in the advertisement is not the one offered to you. These are “representative” interest rates, which implies that they only cover 51% of the accepted applicants
- Major personal loans of this type are only for applicants who have high or exceptional creditworthiness. Before you apply, you should consistently use a qualifying checker to determine the odds of being approved. Thus, even if a warning sign appears, your credit rating stays unaltered
- Although some moneylenders do not charge penalty fees for skipping a payment, your credit rating is likely to be impacted negatively, resulting in more significant implications than a payment of 12 or even 25 pounds.
How do loans for people with bad credit work?
A substandard credit score may deprive you of the lowest rates on a personal loan. However, it won’t prevent you from getting a personal loan.
In fact, some specialized lenders and loan types are available to people with bad credit.
For example, collateralized loans rely on a relative or friend agreeing to sign the contract jointly and take over if you fail to repay your monthly payments. However, this type of loan can be pretty expensive in terms of interest.
Also, in case of poor credit, the money you borrow will probably be lower than if you have a better credit rating, and the APR charged will be greater.
“It’s important to note that individuals with lower credit scores may be eligible for smaller loan amounts and may be charged higher interest rates, also known as an annual percentage rate,” said Mendoza Cooper, financial planner at HSBC. “This is because lenders typically view borrowers with lower credit scores as higher risk and therefore charge higher interest rates to compensate for this risk.”
Nevertheless, if you repay your loan fully and timely, you will gradually improve your credit rating.
To check your creditworthiness, visit a credit-reporting company like Experian or Equifax, and confirm that everything you provide is accurate and current.
If your report contains errors that could lower your score, send a correction notice to the company to rectify the situation.
What does “guaranteed loan” mean?
Your property backs a guaranteed loan. In other words, if you default on your payments, your home could be sold to pay off your debt.
Frequently, guaranteed loans allow you to borrow more enormous sums, and due to their lower risk to lenders, they are more advantageous than secured loans.
They may also have variable interest rates, so the amount you pay each month may vary at any time.
How expensive is your loan interest?
Despite rising annual interest rates on personal loans, the cheapest deals are still a cost-effective way of borrowing, starting as low as 3% for loans of £7,500 to £15,000. For loans above or below this range, the cost is usually higher.
“Advertised interest rate is not guaranteed and is only required to be offered to 51% of applicants by law,” said Cooper. “This is known as a “representative” APR, and it is important for borrowers to be aware that they may not necessarily receive the advertised rate when applying for a loan.”
What does a soft search mean?
Getting to know your situation is best done by using an eligibility checker to discover the available offers for which you might be qualified. This procedure is referred to as a “soft search” and will leave your credit profile untouched.
Which term does a loan have?
The term of your loan varies from 12 months to several years (commonly as long as five years, occasionally 7). When you borrow over a more extended period, your monthly payment is less, but the total amount you have to pay back is usually higher.
How do I proceed if I am having trouble making my payments?
Contact your credit provider immediately if you encounter difficulties in making your loan payments. The lender may give you a temporary payment vacation for one month if your initial costs have been made in full.
If your financial problems are more serious and you can’t keep up with your debt repayment, get back in touch with the lender to talk about it. Being forthcoming is better than ignoring the matter.
By restructuring the debt, your lender will probably offer you a longer payment term. For advice, consider contacting a charity like Citizens Advice or National Debtline.
Is there an option to pay off the loan early?
In case you feel you can pay off your debt early, that’s up to you, but the moneylender may require a prepayment fee, which can be up to 58 days of interest if the term of your loan is longer than one year.
A few smart tips for borrowing
Take advantage of an eligibility checker: This service won’t cost you anything and will preserve your credit rating if your application is turned down.
Compare rates to find the best one: With a comparison site, you’ll see APRs next to each other. Keep in mind that these are just representative numbers, and you may actually be given a higher rate.
Consider taking out a slightly higher loan: Typically, representative APRs drop from a £7,500 loan. If you’re seeking a loan in this amount, it may be wise to borrow a little more to get the best rate. However, take advantage of this rather than taking out a larger loan than what is needed.
Consider other options: Take the example of buying something with a 0% interest credit card, meaning it doesn’t charge any interest. However, annual interest rates are substantially higher on a credit card when you don’t meet your debt obligations during the interest-free period, so be careful.
Disclaimer : All loans and credit cards are subject to credit and underwriting approval. ConsumersAware.org is an information blog and a search platform, not a lender. ConsumersAware.org only works with advertiser partners and networks that comply with laws and regulations of Canada, United Kingdom, United States, Australia, and New Zealand. Credit cards range from $500 to $50,000 with Annual percentage rates (APRs) range from 12.5% to 19.9% and depend on the assessment of your credit profile. Loans range from $500 to $50,000 with terms ranging from 12 months to 60 months or more. Loans APRs range from 5.99% to 29.8% and depend on the assessment of your credit profile. For example, for a $7,500 loan paid monthly over 24 months, a person would pay $332.40 per month for a total of $7,977.60 over the course of the entire loan period.
