Personal loans work by allowing you to borrow a fixed amount of money, which you agree to pay back over a set timeframe – known as the term of the loan.
Personal loans are also known as unsecured loans, which means that the loan isn’t secured to an asset, such as your home.
The total cost of a personal loan is calculated using an Annual Percentage Rate (APR), which accounts for the interest rate and any other additional charges.
Personal loan credit checks
When you apply for a personal loan, we’ll carry out a credit check on your finances. There are two types of credit checks that happen at different stages in your application:
Soft credit check
A soft credit check is a top-level look at certain information in your credit report. This type of check is done first, to assess how successful your application for a loan might be. Soft credit checks aren’t visible to credit companies and lenders, so they won’t impact your credit score in future.
Hard credit check
A hard credit check is a complete search of your credit report and it will be visible on your report in the future. When you submit a loan application, a hard credit check will take place. Too many hard checks in a short period of time can affect your credit score and might make it harder to be approved for a loan in future.
Lenders will use information on your financial history to find out things like:
- Whether you’ve paid back credit on time in the past
- If you’re currently in debt or how much debt you have
- How well you manage regular payments
Personal loan approval process
During the approval process, we’ll look at your:
- Credit score
- Credit history
- Employment stability
Filling in our online application is easy. You’ll be able to upload any documents you need and sign your agreement online too.
How repayments may work
When taking out a personal loan you’re agreeing to pay it back in regular monthly instalments within a set timeframe. You can choose how long you’d like to take to repay the loan. If you want to pay the loan off early, you may be required to pay early repayment charges.
It’s important to manage your personal loan responsibly. Here’s how you can manage your loan effectively:
Keep on top of your repayments – making your monthly repayments on time and in full can help you avoid any penalty fees.
Set a monthly budget and stick to it – this can help you know you’ll have enough money to cover your loan repayments.
Contact us if you’re struggling – if it’s looking likely that you may be unable to meet a monthly repayment, speak to us as soon as possible or log in to online banking to discuss your options.