Personal Loans UK – A Consumer’s Guide

Personal Loans UK – A Consumer’s Guide
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Personal Loans UK – A Consumer’s Guide

Personal loans UK (also known as instalment loans) are a flexible form of finance for consumers seeking funds for a wide variety of reasons. This market is diverse, serviced by hundreds of lenders, presenting a never-ending array of different financial products.

2016 marked a year of significant growth for those choosing personal loans in the UK. This unprecedented rise in the number of unsecured personal loans built on the year previous, 2015, when the market grew by 12%. However, this increase in the number of available personal loans introduces more complexity and room for confusion. Here we explain how personal loans work in the UK – and describe the process of applying.

Personal Loans UK: What are they?Personal Loans UK – A Consumer’s Guide

Personal loans in the UK are today offered by high street providers, such as banks and building societies, as well as financial providers that operate exclusively online.

Personal loans offer a lump sum (also known as a principal balance) on which interest is charged. Interest rates are a percentage of the principal balance, whereas APR (Annual Percentage Rate) interest includes the interest as well as other charges such as arrangement fees.

I have Bad Credit – Will I Qualify for a Personal Loan?

Personal loans are generally designed for those with reasonable credit records (find a list of credit checking resources here, or learn more about improving your credit history in our guide: How to get your loan approved).

What is deemed as ‘bad credit’ will differ from credit reference agency to credit reference agency, and each financial lender and product has its own set of criteria as to whom they will lend. Below is Experian’s breakdown as to how the various credit scores relate to credit ranking, from very poor to excellent.

Personal Loans UK

Image: Experian Credit Scores and Ranking

If you’ve run a credit check and found that you have poor credit, it’s even more important to consider using a credit broker that can help open you up to more lenders, among whom there may be a lender with the right lending criteria.

What are the Different Types of Personal Loans UK?

Type of loanPeriod of loanCredit rangeSecured or unsecured?Credit check?
Homeowner loan5 years – 25 years£3,000 – £250,000Secured against your homeYes
Line of credit loanOngoing£1,500 – £150,000UnsecuredYes
Logbook loan12 months – 5 years£250 – £50,000Secured against your carNo
Traditional Personal loan12 months – 5 years£1,000 – £25,000Not normallyYes
Guarantor loan12 months – 5 years£500 – £10,000NoYes
Payday loan1 month£80 – £500NoYes

Read our guide for more details on the different types of personal loans, which includes the considerations needed of each type of loan product.

Applying for a Personal Loans UK through CashLady

Personal Loans UK – A Consumer’s Guide

CashLady acts as a credit broker, connecting borrowers, with a lender. We have more than 12 lenders in our network – each of which are trusted, reputable providers of finance (find out about our lending partners here). When compared to applying for a loan with a single lender, using a credit broker provides you with more choice and can help those with less than perfect credit records in securing a personal loan.

  • You accept the loan agreement with an ‘e-signature’
  • You receive your loans funds the same day – directly into your bank

When you apply for a loan with CashLady you’ll need:

  • Your address
  • Internet access
  • Details of your debit bank account
  • A breakdown of your income and expenditure
  • An email address
  • Your employment details (such as your employer’s name, address and contact details)
  • Your contact details (such as your email address and mobile number)

Ready to move forward? Apply for a loan online through CashLady now, or discover further guidance on our FAQ page, by contacting the CashLady team or using our live chat feature.