When you’re seeking any form of credit, it’s a good idea to explore every option available to you. If you need to borrow a significant amount of money, personal loans are one way of sourcing it. On this page, we’ll talk about what you can expect from personal loans in the UK and how they differ to other loans. Hopefully, by the end of it, we’ll help you make a confident decision about whether personal loans are right for you.
What Is A Personal Loan?
Personal loans are usually available from your bank or building society, as well as some online lenders.
Just like the loans that we offer here at QuidMarket, personal loans are a type of unsecured cash loan. This simply means that the amount you borrow is paid directly to you (unlike with, for example, a student loan, where the loan is usually paid directly to the college or university) and you do not need to put up collateral (unlike secured loans, such as a mortgage or logbook loan).
The key difference between a personal loan and short term loans is that you’re able to borrow a larger amount of money, and the repayment periods will be longer too. Typically, personal loans in the UK vary between £1,000 and £25,000, to be repaid generally between one and seven years. It’s important to note though that what is available varies greatly between lenders, and is subject to affordability and creditworthiness checks.
What Can Personal Loans Be Used For?
In general, there is a lot of flexibility in how you’re able to use personal loans in the UK. However, taking on a significant amount of debt for non-essential expenses should always be carefully considered.
As the interest rates on personal loans are often lower than those on credit cards, it is common to use them to pay off large credit card balances. This may lower your monthly repayments, especially if you are clearing multiple credit cards or other loans. However, this might not always be the case, so it’s important to calculate the potential savings very carefully.
It isn’t always possible to plan for expensive life costs such as divorce and funerals. They also tend to be much more expensive than anticipated, and so personal loans in the UK may be available to help you cover them.
Personal loans may be suitable for covering non-emergency home improvements. While alternatives are available, such as a home equity loan, some people prefer a personal loan because it’s unsecured, which means defaulting doesn’t come with the additional threat of losing your home.
While we offer emergency loans up to £1,500 for our returning customers, and £600 for new customers, both depending on affordability, if you need to borrow more than this, a personal loan could be a suitable option. Common emergency expenses that personal loans are used to cover include unavoidable home repairs such as repairing a leaking roof.
While we’re lucky to have access to healthcare services that are free at the point of service, some people do use personal loans in the UK to cover medical costs. This could be due to private waiting lists being shorter, or the particular treatment you need not being available on the NHS.
Can You Get Personal Loans in the UK with Bad Credit?
When it comes to finding personal loans with bad credit, your choices will be limited. This is due to the higher loan amounts available, and the fact that there is no collateral or other security to protect lenders in the case of a default. Some lenders may perceive giving personal loans to those with poor credit scores as a higher risk, even if you would be able to sustainably afford the repayments. If you have a low credit score, the interest rates you’re offered on personal loans tend to be higher.
An alternative to personal loans that allows you to borrow larger amounts without risking your collateral might be a guarantor loan. We’ve provided information about them on that link with a few key points to note, so you can decide if they’re right for you.
If you don’t need to borrow as much and don’t want to use a guarantor or offer up collateral, a short term loan could be another alternative to personal loans. Here at QuidMarket, we can consider applications from customers with poor credit scores if they are able to sustainably afford the repayments.
- New customers can borrow between £300 and £600*
- Returning customers may be eligible to borrow up to £1,500*
- Flexible repayment terms between 3-6 months
- No guarantor or collateral required
- QuidMarket is FCA Authorised direct lender
- We follow responsible lending practices
- All levels of credit considered
- Fully transparent, no hidden fees
- Quick and easy online application
- Decisions made by humans, not computers
- Cash in your account as little as 10 minutes after approval
*Loan amounts and repayment terms are dependent on affordability checks
Know Your Options About Personal Loans in the UK
Personal loans have their own pros and cons, and whether they’re right for you will depend on what you’re looking for, and what factors are most important to you. On the one hand, personal loans can provide access to larger amounts of borrowing and you don’t need to provide collateral or find a guarantor for them.
However, it can be much more difficult to be approved for them, especially if you don’t have an excellent credit score. It can also be tempting to borrow more money than you need, or split the repayments over a longer term than necessary. This can lead to you paying interest unnecessarily, and will increase the total cost of your loan.
As a fully transparent, responsible lender, here at QuidMarket we want you to be confident in your decision – whether you choose one of our loans, personal loans, or something else entirely. If you need any more information about the loans we offer, you’re welcome to contact us and we’ll be happy to help.
We provide an alternative to personal loans that are a form of unsecured borrowing. Through us, you can apply for a short term loan to help you cover a financial emergency, especially if you do not have the available credit or savings to help you. As we are a direct lender, we can provide loans up to £1,500 quickly if you are a repeat customer, or £600 for a new customer, and are able to do so completely online, giving you cash in minutes when you need it.
Most personal loan lenders will only provide these for amounts of at least £1,000 due to the fixed interest rates applied and the longer term lengths available. As they are used by borrowers primarily to cover large purchases such as a new car, home improvements etc, they offer much higher values than other types of loans. If you require a loan for less than £1,000, a short term loan might be a better option as you can borrow smaller amounts and choose flexible repayments over a shorter period if this is what you can afford. We can help you apply for a loan from £300 up to £600 for new customers, and between £400 and £1,500 for repeat customers, for short term use to cover a financial emergency.
If you have poor credit and are looking for a personal loan, some lenders may not be able to help, for example, traditional banks. They may have a set criteria and use automated lending processes to provide loans only to those with good credit. An alternative to this is guarantor loans if you want to have someone co-sign the agreement, however, there are bad credit loans available that could help. This type of loan wouldn’t require a guarantor and will consider you as a sole applicant, as long as you have the ability to afford repayments.
A credit check is a vital part of the lending approval process and ensures lenders follow responsible lending guidelines. If you are concerned about having a low credit score and being declined as soon as a lender performs a credit check, you should consider finding lenders who can help with your circumstances. At QuidMarket, we can provide bad credit loans, so even though we will perform a check of your credit file, this won’t be the only deciding factor. We will assess your affordability and whether you can maintain the repayments required, so you still could be successful.