Discover the Best Personal & Secured Loan Rates | moneyfacts.co.uk

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Moneyfacts.co.uk shows whole of market personal loans and secured loans information. For all secured loans will refer you to Loans Warehouse. For personal loans you can choose to go to a lender directly using the Go to Provider button or can opt to use Loans Warehouse to find which lenders will pre approve you for a loan.

Loans Warehouse is an independent credit broker authorised and regulated by the Financial Conduct Authority, who offer a personal loans pre-approval service. Any legal or contractual relationship will be with them. Moneyfacts.co.uk Limited is an independent credit broker not a lender and will receive a payment from Loans Warehouse where customers take a loan following a link to them from Moneyfacts.co.uk. This arrangement does not affect our independence.

Four facts about loans

What are the different types of loan?

There are different loans available for individuals and businesses, and these loans also vary depending on the reason you need the loan and your credit situation.

For individuals, there are personal loans and secured loans. For businesses, there are business loans and bridging loans, in addition to longer-term finance such as commercial mortgages.

Loans for individuals

There are basically two types of loans available to individuals: secured and unsecured. A personal loan, sometimes also referred to as an unsecured loan, allows people to borrow a smaller amount of money – usually up to £25,000 – which is repaid in monthly instalments over a set number of years. This is where you are not obliged to offer any collateral against the money you are borrowing. Instead, your ability to repay will be judged by your circumstances, income, current debts and credit rating among other factors.

You can also find a personal loan where you have a greater chance of being accepted by using a pre-approval loan service. This allows you to enter your details and, without impacting your credit file, see which lenders would be most likely to accept your loan application.

A secured loan allows people to borrow a larger sum of money – sometimes up to £1 million or more – which also must be paid back in monthly instalments. The key difference, however, is that the borrower has to secure an asset of high worth – normally their home – against the loan in order to borrow the money. If you fail to keep up with your secured loan repayments, the lender could repossess your property and sell it to recoup the monies you owe.

Loans for businesses

Businesses can also obtain loans on a non-secured or secured basis. A non-secured business loan operates by assessing the creditworthiness of the business and its ability to pay the loan back. Businesses in search of a secured loan may put up their commercial property or other assets against the value of their loan. If funds are needed quickly and for a short period of time, then a bridging loan may be an option – read more about five ways to use a bridging loan. A commercial mortgage is more suitable when finance is needed for a longer period of time – read more about the differences between commercial mortgages and bridging loans.

The interest rates for this business lending may vary depending on the sector you operate in, the credit history of your business and the assets you have available to secure your finance.

How to choose the best loan for you

There are many factors that need to be taken into consideration when choosing the best loan for you. An important decision you need to make is whether to choose a personal loan or a secured loan; this may come down to how much you want to borrow, but it’s also worth keeping in mind the risks associated with a secured loan. In addition to this, you need to consider how long you want to borrow the money for, and will also need to think about your credit score, which could impact whether or not you are approved for a loan as well as the interest rate you are charged. 

Where can I get a loan?

You’ll be able to get a loan from a variety of sources, depending on the kind of finance you’re looking for. Your most familiar option will be mainstream lenders, such as banks and building societies, which tend to be the first port of call for those seeking personal loans. Specialist lenders are also an option, particularly for those with complex needs and/or a poor credit rating, for whom standard loans may be more difficult to come by. A credit union can also be a good alternative for those struggling to get a loan, however they do have rules about who can use them, for example you may need to live in a specific area or work in a certain sector.
Check out our overview of the best personal loans, as well as a list of the best personal loans for bad credit, to see the options available. You can also use check your eligibility for a loan without effecting your credit score.
For anyone seeking a secured loan, bridging loan or car finance, specialist lenders should be able to accommodate – though here , the support of a broker can be invaluable. A broker will have access to deals you may not be able to find elsewhere, and will have the expertise and, crucially, the network necessary to source the ideal loan for your needs.

Moneyfacts.co.uk has selected the following preferred loans brokers:

Secured loans: Loans Warehouse

Regulated bridging loans: Loans Warehouse

 

How do I apply for a loan?

Most loan applications are pretty straightforward. You’ll be expected to provide your usual personal details and employment details, including your salary and how long you have worked there. You will also be asked what you plan to spend the loan on, as well as your monthly outgoings and details of any outstanding debts such as credit cards, mortgages, other loans or HPI payments.

It’s important to be honest and open – especially about any existing debts you have. Lenders ask for these details to ensure that you will be able to afford the loan repayments and to prevent you from increasing your debt level beyond your ability to repay what you owe.

For secured loans, you might find that the lender requests proof that you are the owner of the assets that you are securing against the loan. The process for obtaining a secured loan is similar to getting a mortgage, requiring in-depth checks and documentary evidence to support your application. In fact they are a form of regulated mortgage arrangement. You will have two mortgages secured against the property rather than the property secured against two mortgages.

Loan applications can be made in writing (using an application form from the lender) or online – with regards to electronic applications some lenders can give you an instant decision on whether you are loan has been accepted or needs to be looked at further.

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