Finding the right loan
A broker will act as a go-between to search and compare loans on your behalf whilst a lender will work with you directly to see if you qualify for a loan. Read our guide to find out more about applying direct with a lender
How a direct lender loan works
The process typically involves applying directly with the lender for the amount you need to borrow and for how long. If the lender agrees, they will tell you how much you need to pay back – including interest. If accepted, some lenders can also send you the funds on the same day. Other lenders might need more information.
Before they agree to lend to you, they will first need to know your income and outgoings. This will help them work out if you can afford to pay back the loan. They will also use the information held on your credit file.
If approved, you could have the money in your account on the same day. Most direct lenders will pay the money into your bank account, they'll then take repayments from this account each month. You normally pay back the same amount every month until the loan is repaid.
Please note that you should only take out a loan if you are sure you can meet the payments. You can use a loan calculator to work out the monthly fee.
Applying for a Vanquis Loan
We may offer loans directly to eligible Vanquis credit card customers via email, SMS or through the Vanquis Bank App.
If you're new to Vanquis, you can use our online loan calculator to see if a loan would be right for you and if you're happy you can then apply online. To apply you'll need:
- your address details
- information on your income and outgoings
- details for any current credit agreements such as other personal loans or credit cards
Most lenders let you apply for a loan online. They may include an online loan calculator. This will help you work out how much you can afford to borrow and how much interest your lender will charge on the loan.
This will be higher if you have a poor credit score. This is because most lenders see lending to someone with a low credit score as risky.
Short term loans typically need to be paid back within 12 months. They usually offer low loan amounts with high interest rates.
These types of loans are aimed at people with poor or bad credit scores. If you keep up with repayments, in some situations, this can help improve your credit score.
Long term loans typically let you borrow more than £1,000, although this can vary from lender to lender. You may not be eligible for a long-term loan if you have a bad credit score.
The longer it takes to repay the loan, the more you pay back in interest and in total. But this does mean your monthly payments will be less. As with any line of credit, you need to work out what terms are best for you before you apply.
Brokers compare lenders to find a loan to suit your needs. This means you may have to fill in more than one loan application. As such, they may charge a fee for their service. This fee will be on top of the interest you pay when you take out a loan. Some brokers may even charge a fee even if they don’t find a suitable loan.
A direct lender will handle your application from start to finish. If they agree to lend to you, they will pay the money into your bank account. You will then repay the lender each month until the load is repaid. Direct lenders do not usually charge fees on top of the loan interest.
Applying with a direct lender cuts out the use of a broker as you apply direct to the lender and they will decide if you are eligible to borrow money. The lender will check your affordability to see if the loan is right for you. If approved, they will pay the money direct to your account.
You will then repay them each month until the loan and interest are paid off. These payments are agreed at the start and should be manageable based on the details you provided. As it is a set amount each month, this should be easier to manage over the course of the loan.
Having a poor credit score can limit your options as lenders can view you as a higher risk and may be less likely to lend to you. But you do have options, some lenders consider loan applications from people with bad credit.
These loans have lower borrowing limits and higher interest rates. The minimum lending conditions for direct loans for bad credit are usually:
- You must be over 18 (For a Vanquis loan you must be over 20 years old)
- You must be a UK resident
- You must not be bankrupt
You will need to meet these conditions before you can apply. If you can’t keep up with repayments, this will damage your credit score. This may make getting future credit more difficult. Repaying your loan on time can help to improve your credit score.