Personal loans are mostly offered by Banks and Building Societies.
But for few instances, they usually do not require any collateral or any security.
Personal loans can be used for home improvements, car maintenance or to buy a car or for a wedding. It can also be used for planned holidays or travel and any other events.
Loan companies generally offer unsecured loan amounts of £1000 – £50,000 in the UK.
Basic Eligibility Criteria
- Applicant must be at least 18 years old.
2. Must be a resident of UK
3. Must have a current account in the UK or with the lender, most cases.
Lenders then proceed to consider the applicant’s affordability. This is based on your credit scoring, income and expenditure. Having a good credit score and clear evidence that you can repay your monthly instalments. This makes your application more likely to be approved.
You may be considered for a loan when you have a fair credit scoring but comes with higher interest rates.
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The Borrowing limits and how long you can Borrow for;
These depends on the applicants personal circumstances but personal loans are typically for 1-10 years.
Choosing a longer term may look affordable but the accumulated interest payment will be higher. Therefore, it is prudent to go for a loan with shorter term on lowest interest you can afford.
As earlier stipulated, personal loans can be used for many purposes. But, loan companies would not offer you a personal loan to undertake the following;
1. Business related purposes
2. Purchase or lease of land or property
3. To buy shares
5. Any investment
6. Any illegal business
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