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A wise guide to…

Loans.

Thinking of applying for a loan today? Choose Wisely works with the UK’s top direct lenders so you can find and compare suitable options whatever your circumstances.

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Representative 69.9% APR (variable). Representative Example: If you borrow £1,500.00 over 24 month at a Representative rate of 69.9% APR and an annual interest rate of 54.19% (fixed), you would pay 23 monthly repayments of £103.64 and a final payment of £103.74. The total charge for credit will be £987.46 and the total amount payable will be £2,487.46.
Choose Wisely is a trading style of Choose Wisely Limited and is a free to use price comparison website. Choose Wisely Limited is authorised and regulated by the Financial Conduct Authority as a credit broker not a lender, firm reference number 730574 and is registered with the Information Commissioner’s Office number Z3106681.

A quick, easy way to get a all loan today.

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Representative 49.7% (variable).

How to get a all loan in 3 simple steps.

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If approved, the cash can be in your account in as little as 15 minutes.[†]

Table of contents

Written by Andrew Freelander
Read time: ~5 mins
Published: 4th April 2016 Updated: 17th September 2020

Finding a loan

A loan can be an effective way of getting the cash and financial boost you need, right when you need it. But with so many options available, each designed for applicants with different circumstances where do you start?

By using the Choose Wisely loan search you can easily find suitable options and compare personalised prices for those who have accepted your application in principle.

When considering loan options it’s of utmost importance to ensure you are comfortable with the repayments alongside any other financial commitments you may have.

How can I improve my chances of getting a loan?

Applying for a loan shouldn’t be a stab in the dark. Here are a few pointers which can help improve your chances of getting accepted:

  1. Check that the details on your credit file are correct

  2. Make sure you are on the electoral roll

  3. Check who will accept your application before you apply direct

  4. Ensure you enter complete and accurate information in your application

  5. Refrain from making multiple applications in a short space of time

Am I guaranteed to be accepted for a loan?

Being accepted and then ultimately approved for a loan can never be guaranteed. Each lender has their own set of criteria which you will have to match. Even then before they make a decision on whether or not to approve your loan they will undergo final checks of your personal circumstances, income and credit history.

Will searching for a loan affect my credit score?

Not when you search onChoose Wisely. Choose Wisely is a free to use price comparison site and by using the Choose Wisely loan search you will be able compare suitable lenders for your circumstance that have already accepted your application in principle without undergoing a hard credit check. If you decide to continue to a lender’s website and submit a full application you will be credit checked.

If approved how long will it take to get the money in my bank?

This depends on who you bank with and the lender you’ve applied with; some lenders advertise payout times as quick as 15 minutes. If you are looking for a quick loan the best thing to do is ensure you are prepared. The biggest hold ups happen when the lender has to carry out additional checks due to the applicant providing incorrect or incomplete details.

How much should I borrow?

Borrowing money is expensive so you should always look to only borrow what you need. However, if you are considering borrowing money it is absolutely vital that you are comfortable with the repayments. There are certain situations where you may be better off borrowing more over a longer period of time as you may be able to benefit from cheaper rates and it may make your repayments more manageable. In this scenario you may pay more in interest, but having smaller monthly repayments can help stabilise your financial situation, and prevent you having to repeatedly rely on short term loans.

How does interest work?

When a lender lends you money they will charge you interest. This is the cost of borrowing money. It’s how lenders cover the costs of providing you with a loan and it’s how they make money. Each lender will charge different amounts of interest and this will usually be aligned with the level of risk they believe is involved with lending you money.

If a customer has a poor credit history, the risk in lending to them is much greater than lending to someone who has a squeaky clean credit file and has never missed a payment. It’s for this reason that lenders who consider applicants with bad credit will most likely charge a higher amount of interest.

Interest will be incorporated into your repayments. When comparing loan options it’s always worth looking at the “total amount repayable” figure as this will show the true amount you’ll have to repay including interest and is an effective way to compare loan options, compared to APR which at the best of times can be confusing.

Pros and cons of personal loans

  • Set repayments
  • If approved, quick access to funds
  • Can be used for almost all purposes
  • Rates can be quite high
  • Potential early repayment fees
  • Bad credit can limit what’s available

Why might you take out a loan?

One of the key benefits of personal loans is the fact they provide a quick cash injection which can be used for almost anything. Here are some of the most popular reasons for taking out a loan:

  1. Home improvements

  2. Weddings

  3. Large purchase

  4. Holiday of a lifetime

  5. Cover emergencies

  6. Consolidate existing debt

Alternatives to getting a loan?

If you are looking to borrow money but don’t want a loan there other ways you access credit.

  • Credit cards are an option, if approved you be granted a credit limit ie. a max amount you can spend. You will then have to make a minimum repayment each month. It will be cheaper in the long run if you always repay the entire balance each month.
  • Credit line. This is like a credit card but instead of having a card this is linked to your bank and acts like an overdraft. One of the biggest providers of this type of credit is SafetyNet.
  • Friends & Family. This could be considered a loan, but borrowing from friends and family can often be a much cheaper way to borrow as opposed to from a commercial lender.

Where can I get loans in the UK?

Most lenders now provide loans online and searching for a loan online can often be a more convenient and cost effective way to borrow money. Reason being, is that with tools like the Choose Wisely loan search allowing comparison of a full panel of UK direct lenders, you can ensure you understand which lenders are suitable for your circumstances, locate your cheapest option and read customer reviews all from the comfort of your sofa.

Loan FAQs

How much can I borrow?

This is dependent on the lender you apply with, your current situation and history of managing credit. Loans are available upwards from £100.

How long can I take out a loan for?

This is dependent on the lender you apply with and your personal circumstances. Some lenders will offer loans to be repaid over a few months, others over a number of years.

What is APR?

This stands for “Annual Percentage Rate”. This is the annual amount of interest you have to pay, as a percentage of the amount you borrow. Confusing we know but by law lenders have to advertise a representative APR which illustrates what at least 51% of approved applicants receive.

What is a soft search?

This is a light check of your credit file. A soft search won’t impact or be recorded on your credit file and won’t provide full access to your credit history. You may still see a soft search on your credit file but other lenders or providers won’t.

How much will my loan cost?

This depends on a number of factors such as your personal circumstances, how much you borrow, over what term and with what lender. By using the Choose Wisely loan search you can compare prices of suitable, personalised loan options.

Can I pay off my loan early?

Almost all lenders will allow you to pay off your loan early. However, some will charge a fee for doing so. This will be outlined in the terms of the loan so worth checking beforehand.

Written by
Andrew Freelander
Brand & Content Manager at Choose Wisely

Andrew joined Choose Wisely 5 years ago, originally working in a design capacity to make sure the website was simple to use. Most notably he worked with the Consumer Finance Association to design the comparison table of choice for High-Cost Short Term Finance products.

The quickest way to find the best all loan for you.

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Important Information.

All of the information in this guide is correct at the time of writing.

Rates shown are quotes based on your personal circumstances, are subject to status and are available to those aged 18 and over. Rates available range from a minimum of 3.9%APR to a maximum of 1575%APR Representative and loan repayment periods range from 3 to 60 months.

[*][†] Once accepted, your loan can be transferred to you in as little as 15 minutes. The time that it takes for the loan to show in your bank account will depend on your lender and your bank.

If you need financial advice you can visit stepchange, speak to citizens advice, call the national debtline or speak to moneyadviceservice.org.uk.

If you've been declined, please refer to your credit report to gain an understanding of why before making further applications.
Your score can be accessed for free via any of the main credit reference agencies such as Credit Karma, Clearscore or Experian.

Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk