Section 1: What is a personal loan?
Personal loans are small loans offered by high street banks and other lenders to individuals. The product is usually for between £2,000 and £25,000 and is offered for fixed periods of between one to six years. Each individual borrower’s loan amount can be adjusted according to the amount of money available.
Unlike business loans and mortgage loans, personal loans usually do not require you to provide a detailed business plan for the funds you want to borrow. However, personal loans are not just used to fund your business expenses – if you don’t need to, you can also use it for regular lifestyle expenses, home improvements and even holidays.
How much can I borrow?
Any loans from Freedom Finance can be used for any kind of purchase. You can buy a new car, lease a new car, buy a new house, rent an apartment, buy some furniture, go on holiday and so on.
Freedom Finance offers loans of up to £25,000 for a Personal Contract Purchase (PCP) which means you only pay for the car up to the mileage of the car and you will drive it for another four years.
Personal Loans from Freedom Finance are priced by amount borrowed and take into account your income. They can be used for any kind of purchase. You can go for either personal loans for personal purchases or Personal Loans for a business.
You can use Personal Loans from Freedom Finance online and you don’t need to fill out an application form. A simple smartphone application will let you apply.
Is there any cost to me?
Most personal loans are made with zero cost or even zero fee upfront, but some lenders charge a small fee for approval. Here’s how to find out what you’ll have to pay.
Your lender may suggest you contact their finance department, as this is where they will offer you the fee-free personal loan with lower APR. Alternatively, they may be willing to meet you in person and agree a personal loan for you, free of charge.
As you’re responsible for the repayment of the loan, it is important that you decide how much you can afford to repay each month, which you can do by multiplying your salary by the interest rate and putting it in an account. Or if you prefer, you can use an online loan calculator to work it out.
How long does it take to be approved for a personal loan?
Normally, loan applications are processed within 24 hours. But in some cases, it can take up to a week. The reason why loan applications take up to a week is that banks ask the applicant to fill in forms to assess their credit worthiness.
For instance, you have to fill in the eligibility section (which requires the applicant to provide your income tax record), the statement of your financial position and the loan application form (which requires information on your savings and assets). Once these requirements are completed, the loan application is assessed and approved.
In addition, applicants will also be required to provide proof of address such as your driving license, passport or utility bill.
Do I need to be employed?
There’s nothing to stop you borrowing money to finance something you do in your spare time – but if you do want to get a personal loan then you’ll probably need to be working. You can usually borrow up to £25,000 if you’re self-employed but a lending service is likely to be able to increase this limit depending on your personal circumstances.
You might need to have been in full-time employment for a year or more, work at least 27 hours per week, and have a clean credit rating.
As well as this you’ll need to show that you have a good plan for repaying the loan, including a repayment schedule.
You’ll need to show that you can repay the money borrowed. You can borrow up to the amount you need up front and repay the rest over a set period of time.
Am I eligible for a personal loan regardless of my credit score?
There are a number of reasons why someone may need a loan – getting a new job, buying a new home, taking out a car loan or extending your current one.
However, because you have a bad credit score, you may be unable to get approved for a loan. That’s because lenders like the credit bureau Experian do not use credit scores to determine who is eligible for a loan. They rely on other factors.
Let’s move on to how to get approved for a personal loan.
Warning: Getting a personal loan may require the loan provider to check your credit score.
Please check how much money you can borrow by checking if you qualify for the personal loan you want.
If you don’t qualify for the loan, you may have to make an alternate plan.
Do you have any other questions on how to get a personal loan?
Please comment below.