What are personal loans?
A personal loan is any loan made to an individual with an expectation of repayment. Personal loans are not known by a specific name, for example, a mortgage, because the credit is not tied to one particular single purpose. Personal loans can be used for various reasons at the whim of the borrower.
A personal loan from Uploan is a loan that can be applied for by all UK residents that have a source of income, are at least 18 years of age and have a UK bank account:
- Loan amounts typically vary from £500 to £2,000
- Can be paid back in monthly repayments ranging from 1 month to 12.
How do personal loans work?
Most personal loans are unsecured loans; thus, they do not require collateral. For example, if borrowers take a loan out to purchase a car or a house (like a mortgage), the car or home is the collateral because the lender can take them from you if you don’t repay.
The loan is more ‘secure’ for the lender because they are more likely to get their funds back from the purchase of the collateral. However, with a personal loan, you usually don’t have to offer anything up in exchange for the credit, making the debt more ‘unsecure’ for the lender.
The main advantage of applying for a personal loan, is that borrowers are not required to provide any collateral in return for a loan. However, borrowers should note that with no collateral, a higher interest rate is placed on the loan in return.
What are personal loans used for?
There are all types of uses for loans. Some of the reasons our customers need a personal loan include:
- Buying a new car or equipment
- Going on a special holiday or other one-off purchases
- Planning for a wedding
- Home improvement loans
- Unexpected expenses
Whatever the reason for taking out a loan, Uploan requires applicants to have a steady monthly income to avoid our customers falling into financial difficulty when they make their repayments. Should our customers experience difficulties with their repayments, they should contact us immediately so we can find together a solution.
How expensive are personal loans?
Sadly, the reality is that it’s hard to find low-cost credit on the market. Traditional high street banks are more likely to be the most competitive; however, they usually contain hidden fees, and their lending criteria are more stringent, resulting in many applicants being rejected.
For those who do not meet the bank’s lending criteria often turn to short-term loans as these are designed for those with an adverse credit history. These borrowers are often enticed with the terms “cheap” or “low-cost” but end up paying more in the long-term through high interest rates and APR.
Furthermore, not all of us haver collateral assets like a car or home that can be offered as part of a loan deal.
Without collateral, it can be challenging for would-be borrowers to get approved for a much-needed loan. Hence if these borrowers fall into this category, then unsecured loans were designed for precisely with them in mind.
Plus, when applying for an unsecured loan, never apply for one unless they are certified by the Consumer Finance Association (like Uploan is).
All you need to apply for a loan at Uploan is:
- Be 18 years or older
- Hold a UK bank or building society account with a valid debit card
- Have a working mobile phone & email address
- No users with a CCJ or CCJs in last 6 years can apply
- Must have regular monthly income of at least £800 (some benefits may be included)
Multiple personal loan repayment options
Multiple repayment options make it easier for borrowers to stay on top of paying back their unsecured personal loans and can all be done from the comfort and security of their own home.
Either they can have funds deducted straight from their debit card each month as a payment request or they can set up a standing order for scheduled monthly payments deducted straight from their bank account each month.
Uploan is aware that monthly expenses fluctuate, sometimes our customers have more income, some months they don’t.
So why don’t loan repayments match this?
Luckily at Uploan, our personal loans have built-in multiple repayment options.
Multiple repayment options are a way that borrowers can repay their loans or other existing lines of credit in several payments, as opposed to one, concluding payment. Simply put, borrowers can repay what they borrowed over a period that suits their repayment schedule and lifestyle.
Uploan is giving its best to provide the best possible lending service. Offering multiple repayment options is one way to serve our customers better.