Extramile Finance

You may borrow money by considering unsecured loans, no guarantor loans, 12-month loans, overdrafts, credit cards, secured loans, etc. However, choosing the right option depends on the loan purpose, cheapest option, amount requirement, affordability, and loan term.    

The blog discusses the loan options, APR, interest and total loan costs and things to consider. It could be helpful for someone who wants to borrow money in the UK for any urgent or long-term need.  

Which is the easiest loan to get approved for?  

The easiest loan to get approved for in the UK is an unsecured personal loan. These do not require any collateral or lengthy documentation. One may instead qualify for an unsecured loan if they have a consistent income, good credit score, debt-to-income ratio, and stable residential history. All these factors help one get affordable interest rates and terms on a loan. 

What are some best ways to borrow money in the UK? 

Here are some best ways to borrow money in the UK:  

• Personal loans  

Personal loans are unsecured, fixed-term products typically ranging from £1,000 to £25,000. They come with a 1–7 years of repayment term. The monthly payments and interest remain fixed over the loan term. It therefore makes budgeting easy. 

• Best for: big-ticket purchases like buying a car or home. You may also use it for debt consolidation, paying bills, wedding expenses, booking a holiday, etc. 

• Typical APR: You may encounter an APR starting from 5.9%-7.5%. The smaller the amount, the higher the interest rate. 

• Key benefits: Fixed monthly payments, no collateral, same-day funding 

• What to consider: Compare the APR and interest rates, check the total cost of borrowing money. 

• Secured loans  

Secured loans involve providing an asset as security to borrow a required amount. The asset you pledge as security reduces the interest and overall amount you must pay on a loan. You may get the amount according to the property value and credit score. 

You may borrow over £25000 for your needs for 10-15 years. It could be an ideal option for individuals with bad credit history seeking cheaper loans for life upgrades. Otherwise, if you don’t want to risk your personal assets, you may consider other cheaper borrowing options in the UK marketplace. 

• Best for: Home improvements, debt consolidation, buying a new home (mortgage), expensive and big-ticket purchases 

• Typical APR: 5.3%-14.5%. Individuals with a good credit score, consistent income, and low monthly debts may qualify for good interest rates and terms. 

• Key benefits: ideal for bad credit borrowers, high payouts, low interest and overall payments, longer repayment terms. 

• What to consider: Home equity and LTV, loan affordability, total costs, and interest rates 

• Unemployed loans 

Unemployed loans are for individuals who lack a consistent source of income. Instead, these individuals depend on part-time income, self-employed earnings, benefits, schemes, and other passive earning sources to fund their requirements. 

However, sometimes the amount available may not prove sufficient to meet the requirements.  This is where unemployed loans prove helpful. It is a secured and unsecured loan that you may consider for your needs. 

• Best for:  Meeting any emergency, short-term, or long-term requirement in the absence of consistent income or a valid income. 

• Typical APR: 42%- 662% APR. The lower the borrowing amount, the higher the interest rate. 

• Key benefits:  Helps the unemployed person meet needs immediately without affecting credit score, get a loan despite lacking a regular income source, lenders may accept alternative income sources. 

• What to consider: additional costs, hidden fees, compare total repayable amount, flexibility on repayments. 

• Bad credit loans  

Bad credit loans are for individuals with credit issues like CCJ, missed payments, loan defaults, bankruptcy, etc. One may qualify for these loans if they have a consistent income, a lengthy employment history, improved financial management, and a stable residential history. 

The interest rates and terms remain competitive on these loans. Therefore, one must determine how much they need and apply for the appropriate amount to meet the requirements without worries. 

• Best for:  individuals with low credit scores, no credit history, inconsistent income, etc. 

• Typical loan APR: it may range from 29%-% 49.9% APR. Yes, the APRs are high, and so are the loan costs. Borrowing a smaller amount would be ideal in these cases. However, it must be sufficient to meet your needs. 

• Key benefits: Get a loan despite a chequered credit history, opportunity to build credit score, flexible payment terms. 

• What to consider: monthly repayment affordability, electoral roll status, soft search or eligibility checkers. 

• Christmas loans 

Christmas loans are unsecured financial facilities that help one meet occasional expenses. The interest rates on these loans stay competitive. The repayment terms remain fixed and flexible over the loan term. 

• Best for:  Home improvements, gifts, holiday bookings, accommodations, buying apparel, paying credit card bills, etc. 

• Typical loan APR: 500%-1250% APR.  Therefore, one must explore the best online borrowing alternatives like 12-month loans, bad credit loans, or no guarantor loans for help. 

• Key benefits:  spread the payments into fixed monthly payments, no early repayment penalties (in some cases).  

• What to consider: account for winter bills, amount for regular bills, beware of no credit check and guaranteed approval claims. 

Bottom line 

These are some options to consider for borrowing options in the UK. Determine the best one according to the purpose, loan amount needs, preferred repayment term, etc. Check the interest rates, total borrowing amount, and APR on the loan. Borrow the loan that offers the cheapest terms, flexible repayment, and early repayment possibilities (without extra charges).