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If you think a personal loan might be the right finance option for you, you can apply to a bank or creditor online, by phone, via the post, or in a branch. Depending on your circumstances, you might be able to obtain a loan of up to £25,000. No matter the loan amount, you’ll typically need to repay it in monthly instalments over an agreed number of months or years. You’ll usually be charged interest in return, and the rate you receive will be based on different factors including your credit history, the loan amount, and the loan term.
Keep in mind when shopping for a personal loan that the interest rate advertised might not be the same one you receive – this will be a representative APR and the rate you’re offered might be higher or lower. Double-check whether the rate is fixed or variable; with a fixed rate loan, your payments will stay the same throughout your term, but a variable rate is more unpredictable. Your term length can also impact your monthly repayments: longer terms usually mean lower payments, but they’re not always the best deal as you might end up paying more in interest over time.
Unsecured debts aren’t secured against any type of collateral like your house or car. This means they can be approved faster than secured loans and the lender won’t be able to seize any assets to reclaim debts without taking legal action first. On the other hand, unsecured personal loans can come with higher interest rates, and you might find it harder to qualify if you’ve had financial problems in the past.
There are many reasons why you might be struggling to pay your personal loan repayments, from an unexpected life change to increases in the cost of living. If you can’t find a solution and fall behind with your debt, you’ll receive a default notice. This is a letter that outlines how much you owe and how you can make up the missing payments. After two or three payments are missed – if you don’t take any action – the loan will default, and the lender will be able to take further action such as taking you to court or employing a debt collection agency.
If you’re facing financial difficulties, consider speaking to your lender first. They might be able to offer a revised payment plan or temporary pause to help you get back on track. You could also seek support from an expert debt advisor. They can talk you through your options and support you to find the right debt management solution for you.
It’s possible to enter into an IVA if you’re on benefits, but you will need to have money left over every month after your outgoings to make payments. You can read our handy guide to debt and benefits here.
It’s also important to check that you’re getting all the benefits you’re entitled to. Being up to date with your entitlement will help to make sure that you’re not losing out on income, and may give you more money to live your life while repaying your debts.
Speaking to an experienced debt solution provider such as My Debt Plan has its benefits. We have a team of friendly advisors who offer debt help every day to UK residents.
We can talk through your options and support you to find the right debt management solution for you.
For free advice about your finances and the debt solutions available that can help you pay off your personal loan debts, call us on 0161 464 0870.
Tell us about your current debts and one of our experienced and friendly advisors can help you get the ball rolling.
Dependant on your circumstances and financial situation, we'll let you know if an IVA is a potential solution for you.
If you qualify for an IVA, we will take the necessary steps to set up and arrange this for you.
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Credit Score Pop Up Wording : An Individual Voluntary Arrangement (IVA) is a formal agreement with creditors to repay a portion of your debts over time, but it does have an impact on your credit score and it will be difficult to obtain further credit whilst on an IVA. Once an IVA is approved, it is recorded on your credit report and will typically remain there for six years from the date it starts.
However, it’s important to note this is the case for most debt solutions and your credit score will likely already have been affected by being in debt in the first place.
Once your IVA is complete you will get a fresh start to begin rebuilding your credit rating.
IVA costs are charged for the preparation of your proposal and the administration of the arrangement for the full term (usually 5 years) these costs are charged from the monthly contributions you make into the IVA and are not in addition. Costs will only be recovered on approval of your arrangement and once you commence making payments to it. The fees for preparation of the proposal to creditors and calling the meeting for creditors to vote on its approval are called nominees fees, the fees for running the arrangement once approved are called supervisors fees. There are also some expenses incurred in the running of the arrangement such as the registration fee and the statutory insurance that needs to be taken by law, these are called disbursements. For our arrangements, the total of all of these is £3,650 although this may be adjusted by creditors when they vote on whether to accept. No matter what the end total of costs come to, you can be rest assured that these will be taken from the monthly payment we agree with you.
