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-£35,000.
- 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.
How much can I borrow?
Lenders typically offer unsecured loans in amounts ranging from £1,000-£50,000.
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.
What can I borrow for?
You can use a personal loan for almost any purpose such as buying a car or to consolidate your existing borrowings.
However, we will not offer a loan for:
- Speculative purchases, for example: gambling, investments and share purchases
- Any illegal purposes
- Business related purposes
- Purchase/Lease of land or property, either full or part purchase (including deposit)
- Timeshares/Holiday Clubs
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 TransUnion.
- 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.
Important legal information
Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. 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.
Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS).
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