How to get a loan

 

Thinking about applying for a loan?

Find out how to get a personal loan with this handy guide. We’ve broken down the process into 5 simple steps, so you know what to think about and when.

  1. Check your credit score
  2. Weigh up your options
  3. Find a lender
  4. Set your borrowing limits
  5. Apply for a loan
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Check your credit score

First, you’ll want to check your credit score. Your credit score matters when applying for a personal loan, as it’s one of the first thing lenders will look at.

We’ll use credit reference agencies like Experian, TransUnion and Equifax to check your credit history. This helps us build a better picture of you and your financial history. So, it’s important you know what your score is and how this might impact your loan application.

A good credit score usually means:

  • you have a strong track record of repaying your debts
  • you are a low risk to lenders
  • you have a higher chance of approval
  • you could qualify for better interest rates.

If you have a lower credit score, you might want to work towards improving your rating before you apply for a loan. This can help boost your chances of getting accepted and could also lead to a better rate.

Learn how to improve your score

Weigh up your options

You can then start comparing your borrowing options to see if a loan is the right choice for you. Here are some things to consider.

Different types of loans

Consider the benefits of an unsecured loan vs a secured loan to work out which one is more suited to your needs. For example, you don’t have to be a homeowner to get an unsecured loan whereas you might need to for a secured one.

How much you can afford to borrow

You could also review your current finances, including your monthly income and expenses. You can use a budget calculator to help with this, so you know how much you can afford to repay each month.

Other ways to borrow

A personal loan is one way to borrow, but it might not be the best option for you. If you’re unsure what fits your budget or needs, you can check out some of the other ways to borrow.

Find a lender

Decided a loan is right for you? It’s time to find a lender.

You can use the APR to compare borrowing costs across different loans and lenders. But you should also look at the other features, such as:

  • interest rates – does the lender offer a fixed or variable rate loan?
  • type of loan – do they offer secured or unsecured borrowing?
  • eligibility checks – can you check if you’re likely to be approved before you apply, to avoid hurting your credit score?
  • managing your loan – can you manage your loan online or in an app?
  • early repayment charges – is there a fee for making extra payments or paying off your loan early?
  • late repayment fees – will you be charged for missing a repayment?
  • repayment holidays – can you apply for a repayment holiday if needed?

Comparing these different features and benefits can help you work out which lender is the right fit for you.

Thinking about a Lloyds loan?

At Lloyds, we offer unsecured personal loans of £1,000 to £50,000, with terms from 1 to 7 years. The amount you could borrow and the interest rate you’re offered depends on your personal circumstances.

You can use the loan eligibility checker tool to see how likely it is you’ll be accepted for a Lloyds loan before you apply. We’ll use a soft credit search, so there’s no impact to your credit score. We’ll also give you a personalised rate.

If you’re happy with the quote, you can continue your application online.

What do we look at?

Lenders will usually look at several factors when deciding whether to offer you a loan.

  • Your credit score - a good credit rating shows us you have a track record of repaying loans on time. This means you’re a lower risk and more likely to get a loan approved.
  • Your employment status – a full-time, permanent job can increase your chance of getting a loan. If you’re unemployed or in part-time or short-term employment, you may be more likely to get declined. 
  • Your income – your loan application is more likely to get approved if you have a steady income, as we can see that you can cover your monthly loan repayments.

Work out your borrowing limits

Before you get a loan, it’s best to set your borrowing limits. You’ll want to think about:

  • how much you want to borrow
  • what you can comfortably repay each month
  • what your preferred loan term would be.

A longer term usually means lower monthly repayments, but you’ll end up paying more interest overall. If you want to pay less interest, choose the shortest term you can afford on the lowest rate you can find.

You can use the loan calculator to try out different limits and get an idea of your monthly costs over your preferred loan term. Then you can get a personalised quote for a Lloyds loan based on these limits.

Apply for a loan

If you’re happy with your quote, you can choose to complete your loan application:

As part of the application process, you may need to give details about your income, spending and any existing credit, along with some ID.

Once everything is submitted and you’re ready to proceed, we’ll complete a hard credit check to confirm what terms we can offer. We’ll then confirm our decision online and get ready to send you the money.

Ready to apply?

Log in to online banking to get a personalised quote. It takes one minute, and usually we’ll tell you how much you can borrow and if you’re likely to get approved before you apply. This won't impact your credit score.

 

It's simple in the app

Scan the QR code to get it.

You must be registered for online banking to apply in the app.

Once you're in, select Apply, Loans and Car finance, then Loan calculator.

Or you can register on our website.

Already bank online?

We'll take you to the right place to get started.

Log in to get a quote

It's simple in the app

You must be registered for online banking to apply in the app.

Once you're in, select Apply, Loans and Car finance, then Loan calculator.

Get the app

Or you can register on our website.

Already bank online?

We'll take you to the right place to get started.

Log in to get a quote

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