Whilst millions of us have taken out loans at some point or other in our lives, many do not fully understand the process of doing so. Maybe time has dimmed our memories, or we jumped at the first product we saw. We decided to examine the personal loan process.
The Personal Loan Process – Who Can Apply?
Most adult UK residents basically! To be eligible for a loan, the criteria from most lenders and brokers is very similar, with minor variations here and there. You need to be 18 years of age or older, a UK resident, have regular income that you can prove, not be in full-time education, have at least an average credit score and not be applying for erroneous reasons. Those with a poor credit score can still access loans from certain lenders, but interest rates will not be as competitive.
Reasons Not To Apply
Lenders tend not to demand to know why loans are being taken out. Their primary concern is the ability of the borrower to pay it back, and nothing else. However, you as a borrower have responsibilities, and should not consider a loan for certain reasons. Not least because some of those reasons will make repayments harder.
The Personal Loan Process – Good Reasons
Home improvements are a satisfactory reason to borrow, as long as you budget for paying it back. Debt consolidation is also a potential factor in borrowing, to move to lower interest rates and lower monthly repayments. An urgent repair is a fair reason to seek additional funds. As is any other type of financial emergency.
The Personal Loan Process – Bad Reasons
Some lenders will ask why you need funds, as it could affect their trust in you to make repayments. Whether they ask or not, you should not take out a loan for any of the following reasons. Firstly, do not borrow to pay for a treat. It is not worth going into further debt for something that is not a necessity. We should avoid speculative purchases with loans at all costs. This includes gambling, for obvious reasons. Money should not be used to help out a business concern, buy land or property or foreign property rentals.
The Personal Loan Process – Requirements To Apply
If you are asked by a lender what the loan is for, you need to have a clear plan available. And a concise answer. You need to be clear also on how much you want to borrow, and how long you want the repayment period to be. Have earnings records and personal details to hand, including bank details.
How much you can borrow if accepted may be linked to the strength of your credit report. So you may have to reevaluate what is offered to you. No lender should force you to make an instant decision. If they do, you should not trust them and walk away. So walk away, take your time, and decide if the terms offered are acceptable to you.
Process
Accept the terms, and you should receive money within a day or so with most lenders. Modern banking allows quick transfer of funds. Then you are up and running, and it is up to you to ensure that you make regular repayments. If you ever struggle to meet your olbigations, contact the lender imemdiately.
