How to apply for a personal loan

For a number of consumers, taking out a personal loan is a daunting prospect. However, the reality is far less intimidating. The stages to complete in order to acquire a loan aren’t giant hurdles. They’re actually relatively simple and very similar to applying for a repayment scheme or credit card.

A secured loan enables homeowners to borrow money from lenders by using their property, or another asset, as collateral. Because the loan is secured, the interest rate is normally cheaper than an unsecured loan and you’re normally able to borrow more. However, it is rather risky.

An unsecured loan is not secured on your home and tends to have a higher interest rate and you can borrow less. However, the benefits are the lack of collateral needed, so your house or any other asset isn’t in danger if payments aren’t met on time or in full.

If you’re a new customer, you’ll need to be aged between 23 and 74 and have a minimum annual income of £15k. These two requirements cover a number of people in part-time employment and university leavers starting out afresh in the workplace. Of course, if you’re an existing customer these processes will be already in place. You must also have an active UK bank account, as well as a permanent UK address. A good credit history is also necessary, and you shouldn’t leave it until you’ve made your loan application to find out if you have one. Credit reference agency Experian and Equifax offer a method of acquiring your credit history without waiting for a positive or negative response from the loan company.

The information required to gain a loan is straightforward. You’ll need to provide your address details for the past five years and your current employer’s details if you’re in employment. Details of income after tax and full information regarding any debts you have outstanding, such as credit cards or other loans, are needed, along with all your credit/debit card details. The entire process takes around 20 minutes to complete, and, should you be approved, the money can be in your account by the end of the working week. This simple process is available to a large number of the population. This means that putting down a deposit on a house, buying a car or consolidating your debts can be performed in your lunch break or evening in front of the telly.        

You can borrow anything from £1,000 to £25,000, or you can calculate your desired amount by working out how much you can afford to repay per month and for how long. By budgeting properly, the loan can be repaid without making a huge impact on your finances. If various debt repayments are being paid throughout the course of a month, certain times can become more restrictive than others. By having a single loan, the repayment date can be controlled, and you can make sure they come at a convenient time, such as after payday. For more information, head to the Clydesdale Bank website.