SOLUTIONS
PLANNING
If you apply for a loan beyond your reach, you may be offered a much worse interest rate than the 'typical' APR advertised or, more likely, you'll be rejected. This will make your credit record even worse, because making multiple applications in a short space of time looks bad to many lenders.
Consider a tactical application. You're more likely to be accepted if you go for a loan with a slightly higher typical APR. Take a look at our loan partners page, for example. (Although we have partners, you can still compare the whole loan market through us.) This page contains the two cheapest loans on the market, supplied by Money back Bank and its owner, Alliance & Leicester. With these, an £8,000 loan over three years will cost you in interest just £778 and £802 respectively.
However, our data shows that just 20% (approximately) of applicants for these loans are successful, because they want the borrowers with the best records. Now compare this with Northern Rock, which costs you £914 in interest, but the acceptance rate is excellent at around and above 40%.
You can make over-payments or pay off a personal loan in full before the end of your agreement without penalty. However if you repay more than £8,000 in any 12-month period the lender may charge compensation (although the amount the lender can charge is limited by law).
STRATEGY
RESULTS
Payday loans are short-term loans for small amounts of money. They are available from high street shops and internet sites. Payday loans can be easy to get but interest rates are very high. There may be other ways for you to sort out your short-term money problem so think about the alternatives before you borrow from a payday lender.
If you decide to get a payday loan, shop around and compare the interest and charges before you borrow. Make sure you are clear about what will happen if you can't pay it back.
This page tells you about what the lender should do before they offer you a payday loan, how you pay back the loan and what happens if you can't pay. It also tells you how to complain about a payday lender.
