Most lenders use a simple calculator to figure out how long it will take you to pay the full amount in installments and your resulting APR (Annual Percentage Rate). This is usually one of the first things you’ll need to do once you’ve decided to borrow money from a licensed lender.
If you are considering borrowing money, you will need to decide whether to go for a secured or unsecured loan. Although the mention of something “unsecured” makes many people uncomfortable when it comes to finances, this method of lending is actually the best option for most people.
What’s more, if you don’t own your home (meaning you rent your home), the unsecured loan is the only option you’ll have, since the property is not yours to secure any loan. While secured loans can be repaid over long periods (several decades, like a mortgage), unsecured loans are the best option for smaller amounts.
Personal loans generally range from £500 to £25,000. Eligibility will usually depend on your credit score, however if you know there are blemishes on your credit history there are loan companies that will consider your application only in personal circumstances. without running a credit check.
In this case, loan companies will usually ask for proof of your monthly income to make sure you can afford your payments. They can request bank statements, pay stubs or speak directly to his employer to find out that he works there and receives the wages he has declared.
If you know your lender will check your credit history, it’s important to know where you stand with the credit bureau. The best way to do this is by using a free website like Clear Score. You’ll be asked to enter your personal details and answer a few security questions, but then you’ll have access to your credit file at any time.
It helps to keep track of your score, especially if you plan to apply for a mortgage or buy a business in the future. However, it is not the be all and end all: there are loan companies that will consider your application without running a credit check. Be on the lookout for “poor credit” lenders.
When you use a loan calculator, either online or through your bank or lender in person, you’ll be asked how much you’d like to borrow. It’s a good idea to spend some time figuring this out. Don’t be tempted to borrow a large amount that you won’t be able to repay. The calculator will help you stay within your means.
You may be asked to state the purpose of your loan. This could be anything from moving house, paying for a wedding, or a consolidation. It’s important to be clear about what you intend to use the money for, as this will tell you what your lender’s decision is, although of course no one will check on you once the money is in your account!
The calculator will calculate what your monthly payments will be, depending on how much you want to borrow and for how long. Personal loans can take anywhere from six months to six years to repay, depending on how much you can afford each month.