Introduction

Personal loans can be extremely useful for life's problems, usually provided by high street lenders, data entry clerks run your credit file and financial history through their computer algorithms and the software determines whether you are worthy of help. Loans vary in many ways and there is a multitude of criteria that will affect the amount and repayments of the loan.

There is a requirement to show proof of the annual percentage rate (APR) on any loan company advertisements. However, these are 'representative' as not all who apply for the loan will get given this rate. However, this review will leave a mark on your credit profile, and if there are too many marks on your profile accumulated in a short period it can negatively affect your credit score. 

It is recommended that you check your credit file before applying for any personal loan. This is to check if any errors may affect your chance of approval. You can complete a credit check through websites such as ClearScore or Experian which will allow you to check your credit report and credit score. If you need a loan but have a bad or no credit history, then you may wish to consider asking someone to be a guarantor (see our “Being a guarantor” section).