What is a personal loan?
Simply put, a personal loan lets you borrow a one-off lump sum that you then pay back over a set number of years. An unsecured loan, as it's otherwise known, is a nice way to meet those large expenses you might not be able to afford otherwise. “Unsecured” means that you won’t be borrowing the cash against something valuable, like your car or home.
So you won’t have to worry about the lender taking your assets if you fall behind on the payments! This makes it less risky for you when you’re borrowing money, but it also makes this type of loan will probably have higher interest rates compared to other loans.
What can I use a personal loan for?
A personal loan is a great way to meet large expenses that you might not normally be able to pay so easily. One-off expenses that you may need a loan for include paying for your wedding or that holiday you and the family have been dreaming of. Personal loans are also handy if you’re looking to consolidate multiple debts into one manageable, monthly payment.
There are many more reasons why you may want to borrow some cash, like doing some home improvements, buying a car or something else altogether. The process of taking out a loan with us and our loans partner, Monevo is the same as any other loan we offer. We’ll ask you for a few personal details and how much you want to borrow. We’ll also take into account your credit score and credit history as well as a few other details.
The pros and cons of a personal loan
Tips for personal loans
Work out your budget first
It can be really helpful to work out your budget first before you apply for a loan. Don’t take out more than you can afford to pay back, and you’ll put yourself in a much better position. You’ll also avoid the risk of defaulting on payments. Try our personal loans calculator to get an idea of how much you might be able to afford.
Don’t apply to a lender directly without shopping around first
Applying for a personal loan directly can be a bit risky if you’re not sure whether you’ll be rejected or accepted. If you apply directly, the lender might put a hard credit check on your profile and you might not even get the loan if your application fails. By using a comparison site like ours you can get a number of prices from some of the country’s top lenders. You’ll be able to check your likelihood of being pre-approved and see who can give you the best deal.
Check your credit score first
Before comparing quotes for loans, it’s worth making sure your credit score is in tip-top shape! Your credit score is one of the ways lenders will get an idea of your credit history and whether or not to lend to you. Getting your score as high as possible should be a priority. Luckily, we’ve put together some tips on how to improve your credit score.
Why use Confused.com and Monevo for personal loans?
We’ve teamed up with loans experts Monevo to offer the best possible deals on secured and unsecured loans. With Monevo’s loan service you get:
A free service with no obligation to apply once you’ve got your rate
Eligibility checks with no impact on your credit score - lending partners run a soft search on your credit file which doesn’t affect your score
If you’re thinking of applying for a secured loan: THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
If you’re thinking of consolidating existing borrowing: YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
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