Frequently asked questions - Loans
Can I borrow money to consolidate existing debts?
Yes, most lenders will allow you to borrow for this purpose. This will be indicated for each provider on the CreditChoices results table. If you are in financial trouble, don’t borrow any more than you need – your credit rating will suffer if you cannot afford the repayments.
Can I pay the loan back early?
Most lenders will allow you to pay your loan off early, but many will charge you for the privilege. This early redemption fee can be the equivalent of up to two months’ interest. Use the CreditChoices loan calculator to see which lenders charge and which don’t.
How do I qualify for the best loan offers?
The best loans with the lowest interest rates are available to those with an excellent credit rating. To improve your credit rating, make sure you’re registered to vote and all your bills are paid on time. To check your credit report, click here.
How does your loan calculator work?
You’ll have to answer a few questions about the type of loan you want, and the loan calculator will give you a list of suitable loans. They are sorted by typical APR. If you want to borrow outside the parameters of an unsecured loan, try a homeowner loan.
How long can I take to repay the loan?
Again, this depends on your lender’s terms and conditions. It also depends on whether your loan is secured or unsecured. With an unsecured loan, the maximum is ten years. You can borrow over a longer period with a homeowner loan
How long will it take to get the money?
For an unsecured loan, it is possible to have a cheque couriered to you within 24 hours, or the money transferred straight into your account. With a secured loan, the lender will have to perform a check on your house, so this can take a matter of days or weeks.
How much money can I borrow?
The amount will depend on your lender and whether you choose to secure the loan on the value of a large asset like your house. The most you can borrow with an unsecured loan is usually £25,000. There is also normally a minimum amount you can borrow – if you need less than £1,000 you might be better off with a credit card. If you need more than £25,000 you will need a homeowner loan that will be secured against your home
Is it safe to apply for a loan online?
Yes. Your application will be kept confidential and you will complete online forms on completely secure pages. The information that you give on CreditChoices.co.uk is anonymous.
Should I get Payment Protection Insurance (PPI)?
It is usually more economic to shop around for cover after your loan has been approved; there are specialist providers of payment protection insurance. Using your lender’s Payment Protection Insurance is normally one of the most expensive options.
Should I take out a homeowner loan or a secured loan?
There are more risks if you take out a homeowner loan – your house is on the line if you fail to keep up repayments. But, because of the higher risk, you can usually borrow more, borrow for longer and benefit from a lower interest rate for the size of loan.
What if I have CCJs and credit problems?
You are more likely to have a loan application accepted if you secure it on the value of your house. But if you’ve had financial problems, you might be better off going to a broker, who will listen to any special circumstances and negotiate a better deal for you. In the long term, we would recommend better budgeting until your credit rating has improved.
Why should I trust the loans listed on CreditChoices?
CreditChoices only lists established lenders and our data comes from MoneyExpert Limited.
Why should I use a loan broker?
Loan brokers search through a range of lenders, so they’re an effective way of shopping around. If you have bad credit, they will also be able to listen to your explanation of why your credit is bad, and might be able to negotiate a good deal for you. Call 01923 368010 to speak with a loan broker directly
Will I be credit checked if I request a loan quote from a broker?
Normally, your credit will be checked for an online application, particularly for an unsecured loan. It won’t be checked for a quote with a broker until you actually apply for the loan.
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