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How to get a loan

How do I take out a loan?

  • You must be over 18 years and a UK resident to get a personal loan.
  • How much you can borrow depends on how much the loan company thinks you can repay.
  • Loan companies generally offer unsecured loans of £1,000-£25,000.
  • Typical terms are from 1-7 years.

Give yourself the best chance of getting a loan by taking the time to:

  • Make sure you meet the basic criteria for a loan.
  • Work out how much you can borrow sensibly.
  • Calculate a reasonable repayment term.
  • Make sure you check your credit report and look for ways to improve your credit rating.

Finding the right loan

Who qualifies for a loan?

There are a few basic qualifications for taking out a personal loan in the UK:

  • You must be over 18 years old.
  • You must be a UK resident.
  • You usually have to have a current account with your lender.
Do you meet these basic criteria?

If you can tick these boxes, lenders will then look at your credit history and current financial situation to decide whether to lend to you. Having a good credit score and clear evidence you can cover your intended monthly repayments will make it more likely you’ll be approved.

If the lender feels there’s a risk you won’t be able to repay your loan on time – based on a history of late or missed payments on other loans for example – they may reject your application or charge higher interest rates.

Borrowing limits

How much can I borrow?

Lenders typically offer unsecured loans in amounts ranging from £1,000-£25,000.

The amount you can borrow and the interest rate you receive is based on your personal circumstances. Lenders look at your credit record and the financial information in your loan application to decide whether you can reasonably repay the amount you’re asking for.

How long can I borrow for?

How long you can borrow money for – the term – varies by lender, but you can typically find personal loans with terms ranging from 1-7 years.

Although taking out a loan for a longer term will probably get you a lower repayment, the interest adds up as the years go by – and you will pay more overall. To pay less interest overall, choose the shortest term you can afford on the lowest rate you can find.

To pay off your debt even quicker, look for personal loan information from several lenders to see who suits your personal circumstances, as many personal loans have penalties if you repay early. That way if you come into some money, you can be free of your loan in less time.

Improving your credit rating

Tips to improve your credit rating
  • Check your credit report: checking your report helps you find out where you stand and where you need to make improvements. It also gives you the chance to check for mistakes. You can get your credit report from agencies like Experian, Equifax and Callcredit.
  • Keep up to date on payments: late or missed payments for loans, credit cards or utilities are recorded on your credit report and could stay there for years. To improve your credit score you should always pay on time, even if you can only afford the minimum payment.
  • Make sure you’re on the electoral roll: lenders often use electoral registers as one way to confirm your identity, so it’s a good idea to sign up if you’re not on there already – even if you don’t intend to vote.
  • Build up a credit history: lenders look at your credit report to see if you have a reliable track record of repaying your debts. If you don’t have any credit (for example credit cards or loans) it will be more difficult for lenders to make an informed decision and they may treat you as higher risk than you actually are.
  • Avoid making too many applications for credit: every time you apply for credit or a loan, a potential lender looks at your credit report. Each time this happens, it leaves a footprint. If you have an unusually high number of footprints on your credit report, lenders may view this negatively, feeling that you’re being rejected by other lenders or that you have too many financial commitments already.
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Important legal information

Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278. Authorisation can be checked on the Financial Services Register at www.fca.org.ukVisit the Financial Conduct Authority website. Lloyds Bank plc is a member of the Financial Services Compensation Scheme and the Financial Ombudsman Service. We subscribe to the Lending Code; copies of the Code can be obtained from www.lendingstandardsboard.org.ukVisit the Lending Standards Board website.

Lloyds Bank plc Registered Office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065.

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