How Much Can I Borrow With Personal Loans?

Personal loans can cover a variety of purposes. Unlike auto loans and mortgages, which are earmarked for auto and property purchase, personal loans aren’t earmarked to solve a specific purpose. You can use a personal loan to renovate your home, consolidate your debts or cover the cost of your wedding. 

Personal loans are unsecured, which makes them easily accessible to non-homeowners. But how much can you borrow with a personal loan? Read on to find out how to apply for personal loans online. 

What is a personal loan?

Personal loans are short-term, unsecured loans to help you tide over a financial crunch. Unlike secured loans, you don’t have to provide collateral security to secure a personal loan. The typical loan amount you can borrow with personal loans ranges between £1,000 and £35,000, which you can pay off within 12 to 60 months. You can use a personal loan for the following:

• Organising your debts with debt consolidation 
• Catering to medical emergencies 
• Building credit 
• Funding home repairs or refurbishment projects
• Financing your wedding 
• Paying for urgent car repairs 
• Regulating daily cash flow 
• Paying for moving costs 
• Funding some urgent operating expenses of a business 
• Financing a holiday

Personal loans usually have higher interest rates than secured loans due to the risk proposition for lenders. But your credit score is the determining factor for what interest rate you are offered by lenders. With a good score, you may qualify for competitive interest rates. The higher your credit score, the better will be the interest rates that lenders offer you. Therefore, self-assessing your credit score before applying for a loan may buy you time to improve your credit score. 

Although, there’s something other than the credit score which lenders factor in when assessing your application. These factors include your credit history, income, employment status, electoral registration, CCJs, etc. So, having a clean financial record may work wonders for your application. 

A personal loan can help you regulate cash flow over a short-term credit crunch. From a big-ticket home improvement project or a wedding to a car repair or minor refurbishments, a personal loan can be your solution to a variety of credit problems. Spread the cost of your venture into affordable monthly instalments over a fixed period with a personal loan.

How much can I borrow through small personal loans? 

You can usually borrow anywhere between £1000 and £35,000, with a personal loan, for 12 to 60 months. However, your financial circumstances and credit score dictate what amount lenders will be willing to lend you. If you apply with an above-average credit rating, proof of stable income, strong employment history, and a low debt-to-income ratio, you may be able to borrow a more significant amount. 

On the other hand, rusty credit history and low income may narrow down your borrowing options. Since it’s a higher risk proposition for lenders, you may not be able to qualify for competitive interest rates.

It is crucial to compare loans offers to make an informed financial decision. However, you shouldn’t only be laser-focused on interest rates when comparing loan offers – it is essential to compare the APRs. The APR or Annual Percentage Rate is an all-inclusive figure that gives you the actual cost of your loan. This includes the interest rate along with all the additional charges (arrangement fee, early repayment fee, etc.) associated with the loan offer. A loan with a low interest rate may have a higher APR. Therefore, APR comparison is a smarter way to weigh up loan offers.

How to apply for a quick loan online?

• Work out a loan amount: Crunch some numbers, assess your income and expenses and work out a suitable loan amount. Ensure that you can afford to repay the amount that you’re planning to borrow. 
• Check your credit score: With a proper self-assessment of your credit score, you will know what to expect when applying for loans. This also gives you a chance to dispute erroneous records and unidentified enquiries into your credit profile.  
• Apply for the loan online: Online application is the fastest and most convenient way to apply for personal loans. Fill out the application meticulously. Oyster Loans understands how cumbersome it is to fill lengthy application forms. Their optimal form design and quick processing shorten the borrowing journey. 
• Compare loan offers: After choosing from a variety of preapproved offers, the lender will run a hard credit enquiry and assess your credit history. Oyster Loans offers personalised loans based on your credit rating and financial circumstances. 
• Complete the contractual formalities: Complete the contractual formalities with the lender. Thoroughly go through your contract, especially the fine print, to check for any hidden charges. Does the lender charge an early repayment fee? Will you have to pay an overhead cost for missing repayments? Beware of these hidden charges. 
• Wait for disbursal: If your loan amount is small, the pay-out may be quick. Lenders usually disburse the loan amount into your bank account via wire transfer. Any delays in disbursal may be due to the bank’s service. Once you have the money, you can use it at your discretion, albeit responsibly.  

From where can I borrow a short term personal loan?

Personal loans are easily accessible. There are many ways for you to borrow one. Borrow through a broker or approach a lender – 2 of the many ways of borrowing a personal loan. Here’s where to find personal loans in the UK:

• High-street banks 
• Building societies
• Credit unions
• Online lenders 
• Online loan comparison platforms such as Oyster Loans
• Dedicated lenders 
• Government grants or schemes

Conclusion

Personal loans allow you to break down the cost of your purchase into affordable monthly instalment over a fixed span. But, it is vital to understand the repayment implications for personal loans carefully. You should carefully assess your affordability before taking out a personal loan.

Failing to keep up with the repayments can damage your credit score. Moreover, if you consistently miss repayments, the lender can get a CCJ issued against you. A CCJ might stay on your credit report for 6 years. This can hamper your chances of securing credit for future life goals and financial milestones.