Unsecured Personal Loans – Find a Suitable Lender

There are a wide range of lenders in the UK that offer unsecured personal loans, but their rate rates can vary quite considerably. That’s why we’d recommend checking with multiple different loan companies before you take out a personal loan with one of them.

What affects the interest rate the loan company will offer me?

The lender will take into account a range of different risk factors to assess how likely you are to pay the loan back – the riskier you seem to the lender, the higher your interest rate is likely to be.

Your income, your monthly outgoings, any other debts you might have, and whether or not you have a history of missed payments or County Court Judgements (CCJs) are some of the most important factors that will influence your interest rate.

Of course, the loan company you choose can affect the interest rate you have to pay as well, because different lenders have different APRs even for borrowers with the same risk profile. That’s why it’s a good idea to check the interest rates offered by a number of different lenders, rather than just going with the first one that says ‘yes’ to the loan.

What affects the lender’s decision to offer me a personal loan or to decline the loan application?

You probably won’t be surprised to learn that a poor credit history could convince some lenders to decline your loan application, because a history of missed loan repayments or CCJs increases the likelihood that you might default on this loan as well.

Still, even if you have a relatively poor credit history it’s often still possible to find a suitable loan – you’ll just have fewer lenders to choose from, and you’ll have to pay a higher interest rate.

Beyond your credit history, your current income and your monthly outgoings could convince a lender to decline your loan application if they feel your personal finances suggest you might struggle to meet the repayments. 

Also, the amount of debt you already have at the time of the loan application could affect your ability to get the loan, because if you have a lot of debts already this could suggest you might struggle if one more loan is added to your debts. 

Which lenders offer the cheapest personal loans?

Each lender has their own lending criteria, with some specialising in cheap loans for people with rock solid credit histories, while others might specialise in offering personal loans to borrowers with a history of CCJs. As such, it isn’t possible to suggest one lender that can offer the cheapest personal loans to every borrower.

The best plan is to check with a range of different loan companies, and then go with the one that’s able to offer the best personal loan at the cheapest APR.