There are many different types of loans and credit options in the UK but, whatever your financial needs are, there is a loan option for you.
From home loans to payday loans and credit cards, we’re going to provide you with a comprehensive overview of the different options available.
What loan type do you need?
The type of loan that will suit you will depend on your financial needs but will also be determined by your affordability. Another two important factors are the availability of security and your credit history and resultant rating.
The combination of all of these factors will determine the type, amount and loan terms that you end up with. We’re going to discuss the purpose of the credit you’re looking for followed by taking a closer look at types of loans available in the UK.
What is the purpose of the loan?
You would have to ask yourself what is the purpose of your loan and why you need the loan in the first place? If you do not have a property to put up as security and are not looking for a car loan then you should consider an unsecured loan, they come in variable sizes and repayment options.
Looking at all types of loans
Unsecured loans are brilliant if you have a good credit score. With most lenders that offer unsecured loans, you will be able to apply for the amount you can afford based on your disposable income available to service the loan repayments.
That being said, it is important for you to consider all types of loans before making an application. This includes both secured and unsecured options, banks, credit unions and alternative credit providers and P2P lending platforms.
Types of loans in the UK
- Personal loans in both a secured and unsecured form
- Peer-to-peer loans that can be obtained online
- Debt consolidation loans which are personal loans and are typically secured
- Short-term loans that are typically unsecured
- Payday loans that must be repaid in full by your next payday
- Bad credit loans for those with a poor credit history
- Student loans from private lenders as well as Government student loans
- Credit cards and a range of revolving loans as well as overdrafts
- Vehicle loans which are secured on the vehicle being purchased
- Home and property loans
- Bridging loans which are usually secured
Need a small amount of cash?
Payday loans are great when you need a little bit of extra cash to tide you over until your next payday. These loans typically come with a high interest rate since the loan term is so short and their use should be limited to emergencies and occasional cash shortages.
Need a large loan?
If you prefer a longer-term loan consider a personal loan, these typically loans carry low-interest rates. Personal loans are offered by most lenders and can be either secured or unsecured. You can also apply for a bad credit loan or consolidate your debt with a debt consolidation loan.
These types of personal loans offer a solution to a specific need or issue and requirements to qualify will be different depending on the lender.
Looking for the cheapest personal loan on the market?
Peer-to-peer platforms which match investors and those looking for personal or business loans offer the most competitive interest rates in the country. This is simply a result of reduced operating costs for these P2P lenders who do not have physical offices and work entirely online.
In addition to peer-to-peer loans, credit unions in the UK also offer highly competitive interest rates on personal loans. These lenders are able to do this simply because they are non-profit organisations that use any profits to bring better and cheaper financial services and products to their members.
Apply for a car loan online
If you want to buy a new car or a second-hand car and you need to take out a loan, vehicle finance will help you do it. You can take a loan out for a car or perhaps buy a car from a dealer and then pay them back. Many dealerships work with some of the UK’s leading banks to ensure that customers get the perfect car loan.
Most of these companies also make sure that you get the best service plan and insurance for your vehicle as part of the package. In the United Kingdom, you can find lovely second-hand cars that you can apply for online.
Use loan comparison sites
There are many sites available for loans and, providers try to remain competitive through advertising and by offering extra features on credit products. With all these extra features and numerous lenders and lending options available it has become quite difficult to compare products.
This is where loan comparison sites come in. They enable consumers to compare products quickly and easily online without having to actually make an application. You can filter through loans by interest rates, loan amounts, features or loan terms available.
Once you’ve found the most competitive product you can follow the link made available on the comparison site and you’ll be sent directly to the lenders online application page.
Use a broker to choose the right loan
Contrary to popular belief, making use of a broker will not cost you more that applying directly with a lender will. While a broker may receive a commission from the lender, their services are free to customers.
Brokers work with a panel of lenders and are best suited to help you find the best loan product for your needs. They will receive your application and forward the details to their panel of lenders who will then make a loan offer. The broker will then help you pick the best quote and finalise your application with the lender.
Loan comparisons can be made online
Applying for a loan online is easy. You can also make use of loan comparison sites. The benefit of these sites is that they will only do one credit check and give you quotes from multiple lenders.
These days is it much quicker to apply for a loan online. You will usually have the cash quickly. Quick loans and payday loans payout quickly, and with car loans, you can get pre-approval on your loan. Whatever your financial needs are there is a lender with the perfect loan for you.