How do you apply for a personal loan?

Taking out a personal loan can be a great solution when your finances need a little boost, provided it is done responsibly. Let’s take a look at how to apply for this useful financial product.

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Choose your lender with care

Your personal loan agreement will be unsecured, which means it won’t be secured against your home or other assets; however, this doesn’t mean you can skip doing your due diligence when it comes to choosing a lender. Be sure that the lender you select is a member of the FCA (Financial Conduct Authority) and bound by its regulations, which will protect you and your interests.

Fill out the application

You will need to apply for the loan via a form, so make sure you have access to key documents to support your application. These will usually include financial documents, such as bank statements and details of your employment or other sources of income, and personal documents, such as proof of your identity and address.

Decide how much to borrow

It may be tempting to take out the full amount available to you, but think first about whether the increase in the price of the monthly repayments will be comfortably within your budget. Look carefully at the actual interest rate offered to you, as the chances are it won’t be the same as the representative rate shown in advertising and could turn a great-value loan into a financial burden. Before you commit, obtain advice on your loan agreement from a specialist such as if you have any queries.

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If you are happy with your agreement, you can expect to receive the loan as a one-off payment into your bank account within a few days of signing and returning the loan agreement.

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