1. What kind of credit is required for a loan?
2. When will I receive my loan?
3. When do I begin repaying the loan?
4. Can I make monthly payments automatically?
5. Can I make loan payments online?
6. Are there any penalties for early loan repayment?
7. Do I need to tell to the creditor how will I use the personal loan?
8. Is collateral needed to qualify for a personal loan?
9. What should I do if I am not eligible for a loan?

1. What kind of credit is required for a loan?
The credit requirements are very different depending on the type of the loan. For instance, one’s credit score is not so important in case of secured credits. So those who have some kind of security to provide as collateral against the credit might have bad credit rating (below 450) and they can still qualify for a secured product. On the other hand, applicants who do not have any collateral are usually required to prove somehow that they are able to repay the money they borrowed. This can be done by using one’s salary as a security (so by meeting the loan’s income requirements), or by having a good or very good credit score (somewhere between 750 and 1000).

The required credit rating also depends on the amount of money one intends to borrow as well as on the future usage of the credit. So it is not all the same if a person needs money to purchase a car, to arrange a wedding, or to buy a house.

2. When will I receive my loan?
The length of the period until which one receives the requested amount depends on the type of the loan and on the complexity of the eligibility criteria. So a product which requires many official papers to be handled will provide the needed money after a longer period of time than simple credits for instance. But usually, after one’s loan application is received and approved, the requested amount of money will be given within a few working days.

3. When do I begin repaying the loan?
The first repayment date is a matter of the loan-type one chooses. Nevertheless, for a regular credit people need to start repayments one month after the agreement is made. Repayment is not so strictly handled in case of education or student loans. These have a so-called “grace period” and only after this period the borrower has to start making payments. The grace period usually begins with one’s graduation, or at the moment the person leaves school and it ends when the very first payment towards the credit is due.

Regarding the repayment term it is true that the shorter the better. Although it may be tempting to choose the lowest monthly payment-amount, but people should know that this is often associated with a longer repayment period, so with a higher total amount repaid towards the credit.

4. Can I make monthly payments automatically?
Due to the advances in technology, today it is possible to arrange the automatic withdrawal of one’s monthly payments from the person’s bank account. Such automatic payments can be programmed to occur each month on an agreed date. This is a convenient way of making loan-payments, and it also eliminates the risk of forgetting to make a payment, which would result in the borrower being charged with additional late payment fees.

5. Can I make loan payments online?
Yes, it is possible to make loan payments through the Internet at the lender’s website. This is a free and convenient method of repaying one’s loan and it is also time-saving. Moreover, borrowers can even schedule their payments in advance, so as to ensure payments will be automatically made each month. One just needs to select the payment dates, the monthly amount as well as needs to enter his or her bank account details.

6. Are there any penalties for early loan repayment?
Those who have the chance to repay their loans earlier than it is required can do so. Nevertheless, in most cases, an early repayment fee occurs if one pays off his or her credit before the official end of the term. One has to check whether such extra charges occur, and if it is so, it is worth comparing whether these charges are higher than the amount one would save with early repayment in interest rates.

It should be noted that according to the Consumer Credit Act, early repayment fees of the interest can be charged. This rule is only valid if the original loan-term is longer than one year and if the advance is maximum £25,000. On the other and, if the above-mentioned term is one year or less, borrowers do not need to pay any redemption penalties.

For those who are thinking about a loan-refinancing, such early repayment charges must be taken into consideration, otherwise they can end up losing more money than it was gained from refinancing.

7. Do I need to tell to the creditor how will I use the personal loan?
Personal loans are unsecured products offered by many kinds of lenders which can be used for almost any purpose. When taking out this kind of product, most of the times the borrower has to specify how the requested amount of money will be used. Most lenders offer applicants a wide range of products, but each of these is for a specific purpose such as for organizing a wedding, funding a dream-holiday, or for medical emergencies.

8. Is collateral needed to qualify for a personal loan?
In order to qualify for a personal loan, no collateral is needed. Generally speaking, eligibility depends on the applicants’ credit histories. Usually the only requirement is that an applicant should have a good credit if he or she wants to qualify for a personal loan.

9. What should I do if I am not eligible for a loan?
Those who are not eligible for a certain loan might try to look for other types which do not have so strict eligibility-criteria. For instance, there are products without credit checks for which almost anybody can qualify although these usually have very high interest rates. Another option would be to provide some kind of collateral against the loan for security reasons which should normally result in one getting the “eligible” status. If neither methods work, the only remaining option for applicants is trying to improve their credit scores so as to become qualified for an unsecured loan.