While some can dip into savings or borrow money from those close to them, others may find it best to instead take out a loan.
While it may be obvious that you need to borrow money, the way in which you borrow may not be so clear.
For those in need of a loan but are unsure where to start – fear not! Here we offer a detailed guide around borrowing money, and the different loan options that could be available to you.
Before we start exploring the different loans available, its firstly important to have thought this through thoroughly, and be sure that taking out a loan is the best option for you.
When in need of money, many choose to dip into their savings or borrow off a family member or close friend. However, if these options aren’t available to you, or you feel a loan may be a better way to go, there’s a range of different lenders to explore.
When considering loans, try to explore options that are best for your circumstances and personal borrowing needs. It’s also important to know exactly how much money you want to borrow, how long for, and what you can reasonably afford – all of this will help you to find the options most fitting to your situation.
As previously mentioned, there are a variety of different ways you can borrow money. Our partner works with a number of direct lenders, offering a range of different loans for customers to choose from, including bad credit loans, no guarantor loans and more.
Below are some of the most common types of loans offered in the UK, as well as the eligibility criteria that can apply:
In contrast to the secured loan, an unsecured loan by definition will not require a valuable asset to be used as collateral should the borrower default. With these types of loans, lenders will assess applications based off of the credit-worthy credentials of the applicant, which can include their credit score and their income.
Eligibility criteria for this type of loan can include:
As the name suggests, a guarantor loan is a type of loan where a guarantor is also included into the loan agreement. This guarantor is typically someone close to the borrower, who has a good credit score and has demonstrated that they are a reliable person to lend to.
Guarantors help to lower the lender’s risk of lending, particularly if the main borrower has a bad credit score.
Eligibility criteria for such a loan can include:
With a secured loan, borrowers are required to use a valuable asset as collateral in case they fail to keep up with repayments. This valuable asset can be a range of different things depending on the lender’s criteria, and can include a house, a car, jewellery or a valuable piece of art.
Much like a guarantor on a guarantor loan, by using a valuable asset as collateral, the lender reduces their risk of lending to the borrower, as it’s ensured that the loan will be repaid if not by the borrower through the collateral they have secured onto the loan.
Eligibility criteria for such a loan can include:
The right loan for you will depend upon your circumstances and the reason you need to borrow the money.
For example, those who have bad credit but feel that a loan is the best means of finance for them may want to consider guarantor loans, bad credit loans, or even potentially secured loans. These types of loans look at features such as the guarantor’s credit history or the worth of the valuable asset to help them assess an application.
This is not to say that the main borrower’s credit history will not play a part in the assessment, however it’s known that these types of loans can consider those with bad credit.
As previously explored, the eligibility criteria can vary depending on the loan you use to borrow the money with – examples of common criteria also listed above. Whilst some of the criteria listed above is typical for those specific loans, these more general requirements will commonly come with most types of loans:
Forces Compare was built out of the ambition to make insurance and finance options more accessible to those in circumstances deemed challenging by providers. We’re a service founded and ran by veterans, created initially for the armed forces, however our services can be used by those who serve as well as veterans and civilians to compare loans and other products.
We strive to help you find fantastic loan options to borrow money through. Simply click the “Get Started” button to be taken to our online application. Here, it’ll only take a few minutes to fill in your details, after which you’ll be presented with a list of different options to explore.
There’s no impact to your credit score and no upfront fees.
If you borrow £550 over 6 months at a flat rate of 207.6% per annum (fixed) with a representative 1013.3% APR you will make 6 monthly payments of £186.82, repaying £1120.90 in total. Loan term lengths from 1 to 60 months.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk
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