Personal loans play an essential role in our lives. Humans are wired to keep their savings untouched until the most critical moment. Until then, they prefer taking out credit to bridge any requirements. be it financing a car or planning for a child’s education. Personal loans make it easy to avoid last-minute disasters and ensure a secure future.
Individuals apply for personal loans for numerous purposes. It grants them more flexibility, relieves stress, and helps them manage credit well.
A personal loan is an unsecured loan provided by direct lenders to individuals for almost any purpose. If you need quick cash at home, you can apply for doorstep loans 4 unemployed. Likewise, you can use it for the most important moments of your life, like – marriage. In this, one can borrow up to £25000 for 5 years or longer.
The article is about the best uses of personal loans for different purposes and financial circumstances.
First, let’s know the eligibility criteria for personal loans.
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Eligibility criteria for taking personal loans in the UK
If you align with the following conditions, you may apply for personal loans in the UK.
- Have been a permanent citizen of the UK for 3 years
- Have a regular income exceeding £12000 a year
- Should be above 21 and no older than 70 with the loan term closure
- Have a sound credit profile without any print of CCJs or bankruptcy
- Should be a UK bank account holder
6 Most Interesting Ways You Can Use Personal Loans
As per statistics, UK citizens use personal loans for many reasons. Let’s begin with the most popular usage:
1) Buying Gifts items
Yes, individuals in the UK apply for these loans to surprise the most special ones on important dates. You can use personal loans for any purpose, and this is one of them.
If you have a best friend’s wedding ahead, you can apply for these loans. Check out loan quotes and ensure sound interest rates for an affordable deal.
Clear Existing Debts
It is the second most common usage of personal loans. Individuals in the UK possess multiple high-interest debts.
It affects the credit score and impacts future borrowing potential. Debt consolidation is one of the best ways to optimize the credit profile and slash off costly loans from the credit report. It helps in budgeting for other things alongside clearing debts.
Many people want to refinance or combine their loans to get a cheaper interest rate. It helps them lower loan repayments too.
If you are someone finding it challenging to manage high-interest loans like- mortgages, student finance, and car finance, you can explore debt consolidation quotes from the best providers.
Check the loan terms and the tenure. It could end up being expensive. Explore and research before halting at a quote.
Home Renovation
Whether you are expecting a grand gathering at your home or wish to increase the resale value, home renovation loans fit your purpose.
A personal loan for home improvement or renovation comes with a flexible repayment tenor ranging from 24-60 months.
In precise, one can take personal loans for home renovation for a maximum of 60 months. If you want to update the ceiling, floor, or deck, expand the study room and apply. Do you not have savings to manage the rest?
No issues. You can borrow a good amount if you can manage repayments and have a sound credit score and income. Home repair loans typically have shorter timelines and are less costly than home equity loans.
1) Wedding
One of the most auspicious phases in one’s lifetime after the birthday is a wedding. It comes with huge responsibilities and of course, expenses. Before encountering such a big expense, it is ideal to ensure savings of at least a year or 2.
However, given the current circumstances in the UK, saving for the long term is troublesome. Personal loans are the best way to cover every marriage expense without sweating fiercely.
You can take out a personal loan for a wedding to support expenses related to:
- Venue booking
- Catering
- Photography
- Invitations printing
- Hiring a Band
- Decorations
- Staffing
- Purchasing or loaning audio equipment.
Yes, you can fetch a wedding loan at a bad credit score. Interest rates may be on the higher side in that case.
If you wish to optimize the loan cost, secure the loan with collateral. It will not only lower the interest rates but help you fetch a higher loan amount. Pro tip- Do not borrow more than what is needed.
1) Purchase a Car
Are you someone who shares buying a car on the top of their wish list? You can tick that off now! Buying a car is a big and life-changing decision.
What if you can buy a car the same day without worrying about money? With personal loans, you can. Be mindful of applying for a car loan and explore different options to choose the right one.
A car loan may prove expensive if you miss payments. Or, if you default on the loan, the lender may take action against you or issue a CCJ. Get pre-qualify for a car loan.
It is a soft check and would not impact your credit score. It will help you get an idea of the total loan costs, interest rates, tenure, repayments, terms, and conditions. To avoid this, you can set up an auto-cut.
1) To Make Ends Meet
One of the best uses of these no-obligation personal loans is- you can borrow a minimal amount anywhere from £100-£1500.
Sometimes, in the absence of cash, one seeks instant financial assistance. For suppose, guardians managing a child alone can seek loans for single mothers to pay for important expenses like- children’s books or stationery.
It does not demand a stellar credit score to qualify. Apply if you have a sufficient repayment source or income from unemployment benefits. Personal loans are the best if you need money to fix a blender, car window pane, pay for a subscription, consolidate loans, etc.
