Approval for an Unsecured Personal Loan in the UK is determined by lenders’ appetite for risk and your Credit Score.
If you’re looking for a cash boost to get you through till payday, spread the cost of your wedding or holiday, or cover an unexpected cost, then a personal loan could be the solution for you.
But finding the right lender and loan deal for your situation can be difficult and, even when you do, being accepted for finance is a different story entirely.
Lenders all have their specific criteria for borrowers, but there are certain things you can do to give yourself the a better chance of being approved.
Here, LoanTube team will look at what you can do to improve your chances of being accepted for a loan, and why you should always shop around to find the most suitable loan provider.
Maximise your options: Compare and apply for loans below with LoanTube
Apply Filters
Loan Amount
£4000 -
£20000
Norwich Trust
Loan Term
1 -
10 years
4.8/5
Representative APR
31.90%
Minimum Age
21 Years
Representative Example: £12,000 over 66 months, 31.9% APR fixed. Monthly payment £358.22 Annual interest rate 28.01% fixed. Interest payable £11,642.52. Total repayable £23,642.52.
4.8/5
Norwich Trust
Loan Amount
£4000 -
£20000
Loan Term
1 -
10 years
Representative APR
31.90%
Minimum Age
21 Years
Minimum Income
£2000 per month
Representative Example: £12,000 over 66 months, 31.9% APR fixed. Monthly payment £358.22 Annual interest rate 28.01% fixed. Interest payable £11,642.52. Total repayable £23,642.52.
Loan Amount
£5000 -
£100000
Evolution Money Loans
Loan Term
1 -
20 years
4.5/5
Representative APR
28.96%
Minimum Age
18 years
Representative Example: Loan Amount: £20950.00, Loan Term: 85 Months, Interest Rate: 23.00% PA Variable. Monthly Repayments: £537.44. Total Amount Repayable: £45,682.15. This example includes a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00
4.5/5
Evolution Money Loans
Loan Amount
£5000 -
£100000
Loan Term
1 -
20 years
Representative APR
28.96%
Minimum Age
18 years
Minimum Income
Not mentioned
Representative Example: Loan Amount: £20950.00, Loan Term: 85 Months, Interest Rate: 23.00% PA Variable. Monthly Repayments: £537.44. Total Amount Repayable: £45,682.15. This example includes a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00
Loan Amount
£1000 -
£10000
1Plus1 Guarantor Loans
Loan Term
1 -
5 years
4.4/5
Representative APR
39.90%
Minimum Age
18 years
Representative Example: Borrowing £3000 over 36 months with a representative APR of 39.9% (variable),the amount payable would be £134.21 a month,with a total cost of credit of £1831.56 and a total amount payable of £4831.56.
4.4/5
1Plus1 Guarantor Loans
Loan Amount
£1000 -
£10000
Loan Term
1 -
5 years
Representative APR
39.90%
Minimum Age
18 years
Minimum Income
Not mentioned
Representative Example: Borrowing £3000 over 36 months with a representative APR of 39.9% (variable),the amount payable would be £134.21 a month,with a total cost of credit of £1831.56 and a total amount payable of £4831.56.
What is a Personal Loan?
- Personal loans are a type of finance given to individual people. They’re also generally unsecured, which means you won’t need to put up any kind of collateral in order to receive the money.
- This makes them an attractive option for those looking for a cash boost without needing to put their family home or car at risk should they miss a number repayment on their loans and ultimately not be able to repay.
- However, this can also make things a little more difficult when it comes to being approved. Your chosen lender has absolutely no guarantee that they will get their money back apart from your word, your credit report, and the details you gave them while applying, so it is likely you’ll have to pay a higher interest rate than you would with a secured loan.
- When used properly, personal loans can be extremely helpful when you need a cash injection to cover your expenses. The first thing you’ll need to do before you can start the application process is to work out which kind of loan is likely to suit you.
Determine Which Type of Personal Loan You Need
- The most common type of personal loans you will be familiar with are usually unsecured, closed-end instalment loans. These have a set end date by which you will repay all of the money you borrowed, along with any charges and interest.
- What you may not know is that things like auto-loans for cars, the mortgage on your home, payday loans, and even credit cards are all forms of personal finance. So, you should always make sure you know exactly what kind of loan you’re looking for.
- If your chosen lender does not believe your credit rating is high enough to receive the prime interest rates or to qualify for their personal loans at all, they may offer you a secured loan option. However, for completely understandable reasons, many aren’t willing to do that.
Check your Credit Rating
- Your credit score will play a huge role in your loan applications. This is your personal rating, which is calculated based on how you have managed credit in the past; such as repaying loans on time and how many lenders, you have applied to for finance.
- Whilst it might be tempting to apply to as many loan providers as you can to increase your chances of being accepted, this can negatively affect your credit rating.
- That’s because each time you apply to a lender they need to carry out a search of your credit history. When they do this, it leaves a permanent footprint on your credit file that everyone who searches your name in the future can see.
- Making multiple loan applications or having loan applications too close together gives lenders the impression that you are relying on the finance to make ends meet; leading them to believe you will not be able to manage your repayments should they give you the money.
- Fortunately, you can check your own credit score using sites like Experian completely free of charge. As mentioned, each loan provider will have their own criteria they need you to meet so that you qualify for their loans. But if your credit rating is low, it may be worth trying to raise it before you apply to increase your chances of being accepted the first time.
Improve your Credit Score
- If your credit score is not very high, the good news is that there are many things you can do to improve it. Your rating is not set in stone.
- There are the credit reference agencies, all of which will show a different credit score for you. The names of these agencies are Experian, Equifax, and CallCredit.
As an example, Experian’s credit scores go right up to 880. With Experian, credit scores can either be:
- Fair – for scores over 640
- Good – for scores over 700
- Excellent – for scores over 760
- Where you fall on the scale could be the difference between being accepted or rejected for a loan so you may want to check yours before you apply for a loan.
- If you are particularly close to the next classification bracket, then working on your credit score could help you access even better interest rates on your loan.
- Let’s say that your credit score was 780. You would already be classified as excellent in terms of credit, so increasing this to 790 would not make much difference to your application.
- However, if you were sitting at 690, then pushing your score up to 700 would give you a ‘Good’ credit rating; greatly increasing your chances of being approved.
- You can improve your credit score by ensuring you always pay bills and loan repayments on time, whilst reducing your debt-to-available-credit ratio. If you know, you already have a late repayment on your record something as simple as waiting six months (and meeting all your financial obligations in the meantime) could also help.
Search for Lenders Within your Reach
- Certain lenders can be particularly picky when it comes to applicants’ credit scores. If your rating is anything less than good, you can expect to be rejected by most high-street banks for your loan.
- Those that don’t turn you down based on a low credit rating will likely say “yes” but ask you to pay higher interest rates to balance out the risk to them that you may not repay your loan.
- Fortunately, there are many alternative lenders that cater to ‘high-risk borrowers’ with lower credit scores. But it is extremely important that you choose carefully. Despite many protections put in place by the Financial Conduct Authority (FCA), some less reputable lenders are still trying to sting borrowers with high-interest rates and charges.
- That’s why it is so important that you hunt around for an appropriate and reputable lender before you apply.
Compare Your Options
- The trick with being accepted for a loan is to find a lender that both offers what it is you’re looking for and is willing to loan to someone with your credit rating.
- If your score is Excellent this step will be easier, however you should always compare lenders to find the most attractive interest rate possible.
- Whatever your credit score, that’s where a credit broker like LoanTube would be able to help.
- When you apply with us, your loan application goes before our panel of FCA-authorised loan providers from across the country. Those who are willing to lend to you will each give you their lowest prices for you to choose from.
- That means you can rest assured that you will probably be approved for your loan whilst still getting a good deal.
Apply with LoanTube Today
- If you’re ready to find a reputable personal loan to suit you, apply through LoanTube today.
- At LoanTube, we work with a panel of expert lenders from across the UK who looks more at the person that they do at a credit score.
- How does it work? Our clever computer system compares real-time offers made direct by personal loan lenders. This is all done in real-time and, once we’ve got all the quotes, we present all these offers with their terms and conditions to you, to be able to take an informed decision.
- We do all the hard work for you – it’s that simple.
- And yes, all this is done in real-time and automatically.
To start your application, please click here.
