A loan can be a useful way of getting financial help when you need it. With so many options available though, finding one that suits you can be hard. By comparing loans online, you can find the best option that works for you. To find the right loan for you, consider choosing how much you'd like to borrow and how long for before applying.
Here, we'll tell you all you need to know about online loans.
Applying for an online loan
If you're thinking of applying for a loan, there are some important things you need to know. In the UK, each lender will have their own set of criteria before they can consider lending to you. This can vary, but as a minimum you will need to meet the following conditions:
- You must be over 18 (For a Vanquis online loan you must be over 20)
- You must be a UK resident
- You must not be legally prevented from borrowing
If you can meet these conditions, lenders will then look at your credit history. They'll also look at your current financial situation. Using this information, they'll decide if they'll lend to you or not. Having a good credit score can improve your chances of getting approved.
If the lender feels you're a risk or don’t meet their affordability criteria, your application may not be successful. If they do approve and you have adverse credit history, then they could charge higher interest rates.
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
When you apply for a loan, the whole process can often be completed online, depending on the lender. This means you can apply at any time 24/7 at your convenience. Some lenders may offer you an instant decision on your application. This means, in some instances, you could have the money in your account on the same day if approved.
If successful, you'll need to provide your bank details. The lender will then be able to pay the money directly into your account. Payments will automatically be taken from this account on the agreed date.
Applying for a loan will leave a record on your credit file. This is because lenders will carry out what is called a 'hard' search on your account. Doing so can have an impact on your credit score. If you already have poor credit this may limit your options for a loan.
Before you apply, you may be able to carry out an eligibility check. This is to help give you an initial decision before you apply but it isn’t a guarantee to lend. It’s worth doing a check first because applying for several loans in a short period could have a negative impact on your credit score. However, not all lenders have an eligibility checker, this can vary from lender to lender.
If you wish to proceed to the full application, a ‘hard’ search will be carried out. This will leave a record on your credit file and could affect your score.
How your credit score impacts your loan?
Your credit score has a big impact on the type of loan you’re eligible for. A poor credit score may suggest to lenders that you have handled credit poorly in the past. Or that you’ve never taken out credit before. In either case, lenders may see you as a risk, and this can limit your loan options.
This doesn't mean you won't be accepted for a loan though. You may still be able to get a loan, but at a higher interest rate. These loans may also come with a lower borrowing limit too. This is to reflect the increased risk of lending to someone with poor credit.
If you have a poor credit rating, a loan could help you improve your credit score as making payments on time and paying off the debt in full will be a positive sign to lenders. As a result, you could see your loan options improve in future.
There are a few things you can do to improve your credit score:
- Register on the electoral roll. This will show lenders that you are who you say you are and helps to protect against fraud.
- Check for mistakes on your credit file. If your credit file wrongly shows you’ve missed loan repayments, this can bring your score down.
- Pay your bills on time. Keeping up with payments on phone contracts and utility bills can demonstrate your responsibility with money.
You then need to make sure you repay all credit agreements on time. This includes loans, credit cards and mobile phone contracts.