Frequently Asked Questions

You can take a personal loan out for all sorts of reasons, the most popular being for a large purchase, such as a car or home improvements. Some borrowers take out a loan for debt consolidation (using a new loan to pay off older debts, usually debts that have a higher interest rate, to save money and reduce the overall amount borrowed quicker).
However, before you rush to apply for a loan or spend money loaned to you, make sure to check any terms or conditions attached to your loan. Some lenders will only approve loans for certain reasons and you must not breach the terms of your loan.

Business loans come in all shapes and sizes, small business loans allow you to borrow smaller amounts and then larger loans that allow you to lend over a million pounds. The loan you are offered is depends on several factors, such as the loan provider, the amount you want to borrow and your business’s finances. The lenders view of financial risk within your businesses and sector, as well as other risk factors, will have an impact on the interest rate of your business loan, as well as the amount they may be willing to offer as a loan.

How much you want to borrow can make a difference to the type of loan you are offered - whether unsecured or secured. There are different lending and options, including direct from a bank, a specialist lender, or even a peer-to-peer loan service.

Whether you are accepted will depend on several factors and requirements. Some lenders require your business to have been trading for a minimum number of years; the business may need a minimal level of revenue, strong trading figures and revenue. Other lenders may look for potential assets as security and how you intend to use the funds they provide.

It's very likely your (and other business partners') financial details will also be reviewed, including your credit score, credit history, current debt and more.

You can apply for a government start up loan if you are 18 or older, live in the UK, have yet to start trading (or started trading less than 24 months ago), and will be selling in the UK.

This depends on the lender, and your unique circumstances. A lender will perform a thorough check of the business and your personal finances, which will take time to complete - having your financials and documentation, such as bank statements and tax returns, can speed up the decision process. Once approved, the loan money can be in the account in days.

If you can get a credit card with a high enough limit, then a credit card could be an option when considering buying a car. However, you should always check with the dealer you intend to buy your car with a credit card, and this will be an acceptable form of payment.

Remember that the interest rates on a credit card will likely be higher than a car loan. If you plan to use a credit card with an interest-free period, make sure that you can pay off the balance before the interest-free period ends. Before taking on debt, take some time to research options available and evaluate your finances to make sure you can take on the additional costs.

If you haven't yet taken out the loan, there are several ways to lower your car loan repayments. The first is to borrow less - either by putting more of your own money towards the purchase as an initial outlay or by choosing a cheaper car. You could also discuss with your lender about paying back the car loan over a more extended period to reduce monthly repayment amounts (although this will likely result in you paying more for your loan over time).

If you have already taken out the loan, it is good to discuss any changes to your requirements with your lender to understand what is possible. This could include making a lump repayment in the future towards the balance of your loan to reduce the amount owed. However, whether you can do this depends on the terms and conditions of your loan and the lender's policies. Thus it's good to think about possible changes you may want later on and check with your lender before applying or accepting a loan that these will be possible.