Personal loans: Guide for newbies
If you’re new to personal loans, it can be a minefield out there! Check out our guide to answer your burning questions and make sure you get it right.
What’s an unsecured personal loan?
Generally all personal loans are what is known as ‘unsecured’. Unsecured loans have no security, so there is no asset associated with the loan. This is unlike a car loan which is generally ‘secured’ against the car. Therefore lenders can repossess the vehicle if a borrower fails to make payments.
What can I use personal loans for?
With a personal loan from The Lending People, you can use a personal loan for (almost) anything! Common uses include travel, home renovations, a wedding, debt consolidation or unexpected bills.
When you apply, our team will ask for the loan is for because, as responsible lenders, we obviously can’t lend for anything illegal. We also can’t lend for gambling or investing or let you take out a loan on behalf of someone else.
What’s an interest rate, exactly?
Interest is the money paid to a lender, on top of the personal loan amount. An interest rate is a percentage of the loan that is charged as interest.
Interest rates are calculated for each individual borrower, and are dependent on a few factors, including your credit rating. Therefore, we’ll be able to let you know your interest rate once we have your application.
Personal loans from The Lending People have fixed interest rates, which means you’ll know exactly how much your rate will be the full period of the loan.
How do repayments work?
Loan repayments are usually set up as a direct debit payment from your nominated bank account. The loan is paid off in regular payments aligned with your income. You can use our handy loan calculator to estimate how much your repayments would be, based on how much you’d like to borrow.
What else do I need to consider?
When taking out a loan, interest rates are important, but there’s other also factors to consider. So, you might want to consider any lending fees, flexibility of payments, whether the rate is fixed, if the lender is responsible and credible, and whether you fit the lender’s criteria. Lending criteria is the combination of factors lenders look for when approving personal loans. Every lender has different lending criteria – The Lending People like to make things happen with flexible criteria.
How do I apply for a personal loan?
The process of applying for a loan can differ between lenders. Sometimes, you’ll be required to visit an office to sign papers, apply over the phone, scan and email documents. Or a combination of all of these. Applying for a loan with The Lending People is super easy, and can all be done online (including on your mobile). You’ll get access to your own online portal. Here you can track the status of your loan, and upload any required documents like bank statements and drivers licence.