Compare 24 month loans
Late repayments can cause you serious money problems. See our debt help guides.
How does a 24-month loan work?
When you take out a two-year fixed-rate personal loan, you are agreeing to pay back your loan in monthly repayments over two years. Because the interest rate is “fixed”, your monthly repayments will remain at the same amount (the final instalment may be a few pence more or less than the others), and you’ll know in advance exactly how much the loan is going to cost you. So long as you keep up to date with repayments, once the two year period is up, your debt will be paid off.
It takes around 15-20 minutes to apply online for a personal loan. Most lenders have a calculator on their website which gives borrowers an estimate of the monthly repayment amount and the overall cost of the loan. This calculation is based on the product’s “Representative APR”, but what many people don’t realise is that lenders are only obliged to award this rate to 51% of those who take out the loan – the other 49% could be given a higher rate. Lenders will normally give you a more accurate quote, plus your likelihood of approval, when you give them a few more details about yourself, including your address, bank account details and salary. This process can involve a credit check, but should not affect your credit rating.
If you’re happy with the rate you’re offered, and the quoted monthly repayment and overall cost figures, you can accept the lender’s offer and funds will normally be “drawn down” (transferred to your nominated account) a day or two later.
What are the payments on a 24-month loan?
|Interest rate of 3.0% fixed p.a.
|Interest rate of 5.0% fixed p.a.
|Interest rate of 10.0% fixed p.a.
Can I get a 24 month loan with bad credit?
Key features of a 2 year fixed rate personal loan
- Borrow £1,000-£25,000. Each lender will have their own minimum and maximum amounts, which often vary according to the length of loan. The amount you’re able to borrow will also be subject to credit and affordability checks. Some lenders will let existing customers borrow up to £50,000 – again, this is subject to approval.
- Fixed monthly repayments. Signing up to a fixed rate loan means you’ll know in advance exactly how much your loan is going to cost you. With this type of loan, each of your monthly repayments will be equal.
- Quick, personalised quotes. With just a few details about your circumstances, lenders can normally give you an instant personalised quote, telling you whether or not you’re likely to be approved and giving a more accurate estimate of the interest rate you’d be charged, the monthly repayment amount and the overall cost of the loan. This should not affect your credit rating.
- Simple application. No more waiting around at the bank or on the phone on hold – it’s possible to complete your entire application online from the comfort of your own home, in around 15-20 minutes (less if you don’t shop around, and simply opt for your current bank).
- Access funds in 1-3 days. Thanks to improving technology, once approved, some lenders are able to have your loan in your account within 1 or 2 days. Generally speaking, taking a loan from your existing bank will make this process quicker, but as you’d imagine, it usually pays to shop around.
- Late repayment charges. Missing your repayment dates could see you face a late repayment fee, and will damage your credit record, making it harder for you to secure credit in the future.
- Early repayments. It is normally possible to pay some or all of your loan off early at any point. However some lenders make this process easier than others. While almost all lenders state that there is no penalty for repaying early, that does not mean that doing so will save you money on interest. If you are hoping to try to clear your loan early, check the terms of any products you are considering, to see if early repayment will actually save you any money. A common policy amongst the big high street banks is to charge 2 months’ additional interest on any sums that are paid early.
It’s also worth noting that while “set-up”, “product” or “administration” fees are very rare these days for personal loans, you should still check whether or not the product you are considering comes with a fee.
Can I take out an extra loan?
Once your loan has begun, there are a few ways that lenders may let you borrow more, or borrow for longer. These will invariably have implications for the overall cost of the loan.
- Repayment holidays. This is a period of time (normally a month or 2) offered by some lenders, where you’re not required to make repayments on your loan. This gives you financial “breathing room”, but means you’ll pay more in interest overall. If you take a 2 month repayment holiday, for example, your loan will then last 2 years and 2 months, and will cost you more in interest.
- Top ups. “Topping up” is increasing the amount borrowed, midway through a loan. Some lenders allow it, subject to approval, and some don’t. Many lenders will require that you close your original loan account and begin a new, larger loan. You may not keep your current rate, and you may incur charges.
- Extensions. Most lenders will not allow you to extend your loan, but as above, may allow you to close your current loan and begin a new, longer loan. Again, this will be subject to approval, you may not keep your current rate, and you may incur charges.
- Multiple loans. Each lender will have their own policy on running 2 or more loans concurrently. For some lenders it will be a flat “no” – insisting that you close your original loan and begin a new loan. Again, this will be subject to approval, you may not keep your current rate, and you may incur charges.
Can't I just take out a credit card?Potentially, yes. However the answer depends on what you’re buying, when you’re buying it and how you intend to pay the money back.
Personal loans come in a lump sum – you have a predetermined amount of time to pay them off. By contrast, credit cards are a revolving form of borrowing, so they can theoretically last a lifetime. You borrow what you need, when you need it (subject to a card’s monthly limit) and you have to make at least a minimum monthly payment on your balance. This can tempt borrowers into only paying the minimum and making additional purchases later on, resulting in indefinite debt. Credit card interest rates are generally variable, but cards often come with a promotional fixed rate introductory period.
Using the wrong credit card could cost you more, because credit cards tend to have higher rates than personal loans. However, a card with a promotional rate of 0% on purchases could be a smart option, depending on your circumstances.
Finally consider any other fees (application, monthly or annual fees), any offers/rewards and the length of the application/approval process before settling on a credit card, personal loan or other form of credit. Don’t forget that you’ll pay a charge each time you withdraw cash on a credit card.
Benefits and drawbacks of a 2 year personal loan
What are the eligibility requirements?
Eligibility requirements will vary by lender, and you should always check this before you apply. Lenders will typically require you to meet the following criteria in order to be considered:
- UK resident
- Aged 18 or over
- Hold a UK bank or building society account with a valid debit card
- Able to provide 2 years of address history
- Be employed with a minimum annual income
- Have a good credit rating with no record of bankruptcy or CCJ’s in the last 6 years
Frequently asked questions about 2 year personal loans
Will you be approved?
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