Lenders will normally find your eligibility through a credit check. You may also need to be in full-time employment or have regular money coming in that's above a stipulated threshold. The amount you will be eligible to borrow will depend on your credit rating, your monthly income and how much you can afford to repay.
But gone are the days when you had to go into your bank and ask for a personal loan directly. These days, you can borrow money from a network of trustworthy lenders online – even if your credit score is low. However, to make sure you don't end up paying sky-high interest rates or pricey hidden fees, you'll need to know the right places to look.
It's best to spend some time researching the most reliable and trustworthy lenders online. There are financial experts with websites and blogs that may be able to recommend you further. It's also a good idea to read through forum posts or customer reviews to flag up any dodgy or inauthentic lenders – it's easy to get caught out this way.
You may consider using a lending platform that can connect you with a network of lenders that have been pre-vetted. This is a great way to find trustworthy lenders with the best APR (annual percentage rates) to make sure your details stay protected and you get the best deal.
The type of lender you choose will depend on a number of factors related to your current financial circumstances. There has been a recent trend of "payday" lenders, allowing people to borrow small amounts to tide them over until the end of the month. However, many of these short-term fixes are best avoided, as their interest rates are incredibly high.
If you only need a short-term loan, it's best to consult your bank or a reliable online lending source. The best lenders will advertise APR rates between 5.99% and 35.99% depending on your personal circumstances, so rule out any lenders that charge higher annual interest rates than this.
If you know your credit score is low (you can check this free online using a site like Clear Score), you will need to find a lender that accepts those with poor credit history. These lenders will decide how much you can borrow depending on other factors – your monthly income, reliable employment, time spent at address etc.
Be aware that late repayments will adversely affect your credit score, so don't borrow more than you know you can pay back. The most responsible lenders will calculate how much you can afford to pay depending on your monthly income, any outgoing and your chosen repayment period, so should not offer you a greater amount than you can afford.
Once you have found a personal lending site, you will need to apply to borrow money. This will usually involve filling out a simple form. You may be asked the purpose of your loan, how much you need to borrow and how long you think it will take you to repay it.
Once you have entered these details, an online tool should calculate how much your monthly installments will be, and how long it will take you to repay your loan. You will then need to give proof of your identity, income and possibly your employment before a decision is made in response to your application.