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A guide to personal loan products in the UK

Personal loans in the UK are exactly what they sound like; a cash sum you can spend on whatever you like, such as a car or home improvements, to pay back over the course of a few months or years. Of course, you always pay interest on the amount you borrow, so it's important to find the best rate going for your needs.

 

How much can I get?

Depending on the provider you could get up to £15,000. Some lenders may give you £25,000, but this is unlikely as most loans up to this amount are secured on your home. Unless you get a secured personal loan in the UK, you won't normally find finance over £25,000.

 

How long is the term?

Again, this depends on the provider. The term is simply the amount of time you spend paying back the loan - it could 6 months or 5 years, but you normally get a choice in what kind of term you want. The longer your term, the less your monthly payments will be, so it's often a good idea to stretch out larger loans.

 

Who provides loans?

Personal loans in the UK are provided by banks, building societies and now supermarkets. There are some other finance businesses that offer loans, some of which operate entirely online or only operate in personal loans (i.e., Ocean Finance) but you should only go to a company with a well-established reputation if you need a loan.

 

What kind of credit do you need for a loan?

To get the best interest rate and finance off the leading personal loan providers in the UK you'll need a good credit rating. This means minimum missed payments, hardly any defaults and a good, clear record. You can get loans if you have bad credit but the rate will be a lot higher, especially for unsecured loans. If you want a secured loan for bad credit, try Ocean Finance, one of the leading providers for bad credit homeowners.

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