By Craig Upton, CEO of iCONQUER

Shopping online for a personal loan has never been easier. If you need an urgent loan for any purpose, it can often be quicker to apply online than head to a High Street bank; the most competitive deals on the market can often exclusively be found online.

In terms of what influences the costs and affordability of a personal loan, the following will be taken into account by your chosen lender:

Monthly Income. This will typically form the basis of how much you are eligible to borrow, calculated as a percentage of how much you earn.

Credit Scores. A detailed credit check will also be conducted as standard with a personal loan application. The stronger your credit score, the more competitive the deal you will be offered.

Current Debts. You may be asked to provide information on any other debts you currently have, including overdrafts, credit cards, mortgages and personal loans.

Track Record. If you are an existing customer at the bank in question, your track record and general relationship with the bank could influence its decision.

Loan Length.  How quickly you intend to repay your loan will also influence the applicable interest rate and overall borrowing costs on the facility.

Loan Purpose. Some types of unsecured personal loans are issued with specific purposes in mind, such as purchasing a car or for home improvements. This may also have a bearing on the competitiveness of the loan.

To qualify for a personal loan online, you will also most likely need to provide proof that you are a UK resident, are over the age of 18 at the time of the application and have a regular source of income.

Ensuring You Get a Good Deal When Applying Online

When applying for a personal loan online, there are steps that can be taken to ensure you get a good deal. Examples of which include the following:

1. Use a Comparison Site – Applying for a personal loan via a comparison site means broadening your search to a much more dynamic range of products from reputable lenders across the UK. The broader the comparison, the more likely you are to find an unbeatable deal.
2. Check Your Credit Score – If you have a poor credit history, you may need to direct your applications exclusively at subprime lenders. Most conventional lenders are unwilling to consider unsecured loan applications from poor credit applicants.
3. Explore the Options – By adjusting parameters like the size of the loan and the length of the repayment period, you could drastically alter the total costs of the facility. Typically, loans repaid faster are more cost-effective than those repaid over longer periods of time.

When to Consider a Secured Loan

If you own your own home, you may find a secure loan an even more affordable option. Loans can be secured against the equity you have tied up in your property, often at an unbeatable rate of interest.

Secured lending could also be a more appropriate option for applicants with poor credit, a history of bankruptcy or no formal proof of income.

In addition to the above, it is also worth considering the alternatives to a personal loan. Examples of which include credit cards and overdraft facilities, which in both instances may be offered at 0% interest for a temporary period.

If considering a secured loan, consult with an independent broker for more information on the options available to suit your requirements and budget.

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