How to get a loan
Find out more about getting a loan, from choosing the right provider to how it affects your credit score
Key takeaways
You can apply for a loan online, via an online banking app, or in a bank branch
Most loan applications leave a footprint on your credit report
Lenders will look at your income, outgoings, credit score, loan purpose, and how you match the loan eligibility criteria
Whether you need to borrow money for a new car, to make home improvements, or to pay for a wedding, loans can be useful. But they are a significant financial commitment, too. Here we look at how to apply for a loan and how much it will cost.
How can I apply for a loan?
You can apply for a loan online, through a banking app, or in a bank branch.
To apply for a loan, you will usually need to give the following information:
Your full name and your address history for the last three years
The reason you’re applying for a loan
Age and date of birth
Whether you’re a UK resident
Details of your income and employment
The regular bills you have to pay
Any financial dependents you have
Any outstanding debts you are currently paying off
The provider will then check all your details to decide whether to lend you money or not, how much money it will lend you, and at the interest rate it will charge.
How long does it take to get my loan money?
If you are approved for a loan, the money can usually be transferred to your bank account within a few days. With some lenders you may even receive the money on the same day.
💡 Top tip: Exact timescales depend on the lender and how fast it works, and also how straightforward your application is. If the lender needs more information, this can delay the process.
How much can I borrow as a loan?
How much money you can borrow depends on factors such as your financial circumstances and your credit history. The better your credit score, the more chance you have of being accepted for a larger loan with a cheaper interest rate. If your credit score is poor, you might be offered a smaller amount with a higher interest rate.
📌 Try not to borrow more than you need as you’ll be paying interest on it. You will also need to decide how long you need to pay it off – this is known as the ‘loan term’.
🚩 Our loan calculator can help you work out how much a loan will cost.
Each loan will come with an APR - annual percentage rate. This figure is useful when you compare loans.
How long can I borrow the money for?
The length of time over which you repay the money is known as the loan term. It can be as short as three months, or it could run to five years or longer.
The term of the loan can make a big difference to your monthly repayments. The longer the term, the smaller your monthly repayments will be, but you’ll be paying off your loan for longer – and you’ll pay more interest overall.
📌 Monthly payments are normally made by direct debit.
Can I get a loan with bad credit?
Yes, if you have a poor credit score, you may still be able to get a loan but your borrowing options may be more limited There are specialist lenders providing bad credit loans, although these are usually more expensive than a loan for someone with a good credit score.
If you own your home, you may be able to get a secured loan or home improvement loan with bad credit.
💡 Top tip: Our credit score service is a free tool where you can check your credit score, and it’s full of helpful tips for boosting your chances of being accepted for a loan.
Can I get a loan if I am unemployed?
If you’re unemployed, there may still be options available for you for taking out a loan. Most mainstream lenders will require proof of a regular income, but there are government loans available. You might be able to take out an advance loan if you’re receiving Universal Credit, for example.
How can I boost the odds of getting a loan?
The better your credit score, the better your chances of being approved for a loan. Before you apply, check your credit score. If it’s low, you may still be accepted for a loan but it is likely to be at a more expensive interest rate.
There are several ways to boost your credit score. These can include, paying off existing debts, making household bill payments on time, and signing up to the electoral roll.
Frequently asked questions
Do I need a loan?
A loan can be a way to help you afford something sooner – to pay for a holiday or to consolidate existing debts, for example.
You can use a loan for a range of purposes including: spreading the cost of a car, to help make home improvements, to buy a property more quickly (by using a bridging loan), to help pay for a wedding, to help fund your next holiday and to help consolidate existing debt to reduce the interest you pay.
How much can I borrow?
How much you can borrow will vary by provider and your credit history .
The typical loan amount can be anything from £1,000 to £15,000, depending on what you’re using the loan for. If you’re looking for a loan larger than £15,000, you might need to look at secured loans rather than a personal loan. The representative APR of each loan option will be shown when you apply.
How long can I borrow for?
How long you can borrow for (the term of the loan) can make a big difference to your monthly repayments. The longer the term, the smaller your monthly repayments will be, but you’ll be paying off your loan for longer – and you’ll pay more interest overall.
Loans differ in length. You can usually choose your loan term. It could be as short as three months, or it could run to five years or longer. Some loans allow overpayments so you can pay it off quicker.
What are the easiest loans to get in the UK?
The easiest loans to get in the UK are usually those designed for people with bad credit, low income, or limited credit history. While they may be easier to access, they often come with higher interest rates or stricter terms, so it’s important to borrow responsibly.
You may also be able to get a overdraft on your current account, depending on your personal circumstances.
Approval for personal loans, car loans, and credit cards vary based on your credit history and income. Some loan providers give more favourable loan rates to existing customers.
Can I use a loan to pay off other debts?
Yes, you can use a loan to pay off other debts. This is known as debt consolidation.
Typically, it involves taking out a new loan with a lower rate of interest and using the new lump sum to pay off existing higher interest debts, such as credit cards.
While you won’t necessarily reduce the total amount you owe immediately, it should make loan repayments more manageable. Also instead of multiple monthly payments, you’ll make just one monthly payment.
What are the common questions on a loan application form?
Loan application forms commonly ask for personal information like name, contact details, and address as well as employment details and monthly earnings.
Additionally, forms typically request information about the purpose of the loan and how much you want to borrow. Questions about existing debts and financial assets – such as whether you are a homeowner – might also be included.
Providing accurate and complete information on these questions is crucial for a successful loan application.
Apply for a loan with MoneySuperMarket
MoneySuperMarket streamlines the loan application process and we will show you how likely it is that you will be accepted for a loan. We compare loans from a host of UK lenders, and only use a soft search so there is no impact on your credit score.
MoneySuperMarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead, we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.
Author
Rebecca Goodman
Personal Finance & Insurance Expert
Rebecca is an award-winning financial journalist with over a decade of experience writing for print and online media. Her mission is to take the jargon out of personal finance and to help everyone...
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Emma Lunn
Personal finance expert
Emma has written about personal finance for almost 20 years, with a career spanning several recessions and their inevitable consequences. Emma’s main focus is helping people learn to manage their...
