Please note: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.
How to apply for a personal loan
A step-by-step guide to help you through the loan application process.
If you’re strapped for cash or have an unexpected expense that needs taking care of then a personal loan might be the right option for you. A personal loan can help you deal with costs that are above and beyond your savings, from repairing a car to financing your wedding. Our page will help guide you through the process of applying for a personal loan.
Jump to the step-by-step walkthrough
Before you apply
Before you start on the application process, confirm what type of loan you need. Personal loans are generally fixed-term, fixed-rate, unsecured products. They use your credit history to reduce risk, rather than using an asset like your house or car as collateral. If you need a larger loan or an ongoing, flexible source of credit, for example, then you may want to consider other financing options like secured loans or credit cards.
The amount you borrow will normally be based on the expense you’re trying to cover, and the duration of the loan will normally be based on how much you can afford to pay back each month. It’s better to determine how much you can spend each month and borrow less than your maximum so you can avoid stretching yourself too thin. You should never borrow more than you can afford to repay.
Taking out a loan that’s too small can leave you with remaining financial needs, but if you take out a loan that’s too large, you’ll be stuck paying interest on a larger amount than necessary. This is why you should carefully calculate the debt you can handle and the amount of your purchase before you apply.
By comparing lenders you can ensure that you pay as little interest as possible, and can keep the loan as short as possible.
Most personal loan applications are fairly straightforward and take around 15-20 minutes. To make the process straightforward, and so that you don’t waste your own time, you should take a moment to considering the following points:
Eligibility requirements:
Each lender will list its own minimum criteria for applicants, and if you don’t meet these terms, you shouldn’t apply. Meeting these terms doesn’t guarantee approval, just that your application will be considered. While criteria can vary from lender to lender, below is a typical example:
- You are over 18 years of age.
- You are a UK resident.
- You have a UK bank account.
- You have a regular source of income and can afford the repayments.
Credit report
The lenders that offer the best rates typically issue loans to the lowest-risk applicants, and risk is primarily assessed through a search of your credit file, which is held by credit reference agencies (CRAs). The three main CRAs in the UK are:
- Experian
- Equifax
- TransUnion
It’s free and easy to check your own credit score with any of the above. But even easier than this is using a soft search facility or eligibility checker provider by the lender that you have in mind. These give you a good idea of whether or not you’d be approved for a loan, without affecting your credit score.
Documents
In order to lend responsibly, lenders will require:
- Proof of identification
- Proof of address
- Proof of affordability
However when you apply for a personal loan online, most lenders can now electronically verify all of these through a credit reference agency CRA. In this case, you may need to answer some questions that only you would know the answer to, but you won’t have the hassle of having to dig out any ID, bank statements etc.
If you apply in a branch, you’ll need to prove your ID and address with separate, acceptable documents, and you may be asked to prove your income (generally through the last two months of payslips and/or bank statements, or if you’re self-employed, a HMRC document confirming your latest tax return calculation).
How to complete your loan application
Find the lender you want to work with then go to the website and apply for the loan. Fill out the basic information, such as loan amount, loan purpose and loan term. 
As you continue, you’ll be prompted to fill out more pages detailing your personal information including your date of birth, email address and contact details.
Next you’ll detail your current living situation. You will need to input your home address details, time at the residence and other identifying information.
You will then add your employment details. Lenders don’t tend to contact your employer, they just need to understand how you generate an income. You will have to include your employment status and length of employment.
You will also need to include your monthly income and expenses. Make sure you enter accurate information because this will affect your chances of receiving a personal loan. Include your net income, your rent or mortgage repayments, any other personal loan repayments and other expenses.
If you would like to receive your personal loan into a specific bank account then input the details. Add your bank account number, sort code and card number.
Following recent changes to data protection laws you will now need to fill out a marketing communications consent form. You can opt in or out of this option.
Once everything is filled out, verify that the information is correct and submit. You’ll be notified with a decision on your loan application within a few minutes. If you’re approved, your lender will likely contact you to confirm your information, and most people receive their loan funds as soon as one business day after approval.
What happens next?
The application process may vary slightly from lender to lender, but generally they all follow a format similar to the one above.
Receiving your loan funds.
Many lenders and banks require that you have a current account to receive your loan via a direct transfer, but that’s not always the only option. Some lenders will be able to send you a cheque or load your money onto a prepaid debit card. If this is important to you, ask your lender how they transfer funds.
Make your payments on time.
It’s very important to make your payments on time so you don’t end up paying extra in fees or damaging your credit. Be sure to verify how you’ll make repayments. Can you pay by phone with a credit card or account number, online through the lender’s website or do you need to mail a cheque? Is there an automatic payment option? These will impact which lender you choose and how you’ll pay off your debt.
Find a personal loan
Table: sorted by representative APR, promoted deals first
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With no guarantor
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With a guarantor
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With a guarantor who is a homeowner
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Late repayments can cause you serious money problems. See our debt help guides.
Frequently asked questions about applying for loans
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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