UNSECURED LOANS GUIDE

Flexible loans are designed for people who think there is a good chance they will be able to pay their loan off early, but who want the comfort of a longer term if that is not possible. They are just like a normal personal loan, however you are not charged a penalty for repaying early and you can repay differing amounts each time a payment is due. You may also be able to get a payment holiday at the start of the loan.

 

In Detail

A flexible loan is basically a personal / unsecured loan, but with a few extra characteristics as mentioned above. As such, you can borrow up to £25,000, and choose to repay the money over a period of up to 5 years. You can pay different amounts each payment date, but there will always be a minimum amount that you have to meet. If you do choose a payment holiday, remember that interest is still accrued over this period.

 

Loan rates are similar to a standard personal loan, but they may be slightly higher. Rates of 6 to 12% are typical of someone with a good to fair credit score. This is because the lender wants to make money off you, and if you repay the loan early they will not make as much profit. Therefore by increasing the lending rate the lender will cover the money lost by those people who do pay their loan off early. It’s all about doing what’s best for your situation. What you lose with a slightly higher interest rate, you gain with the flexibility of being able to clear your loan much earlier than normal.

 

How to Get the Best Offer

This type of loan flexibility is only offered by a few lenders. Not all of them are based on the high street, so you may need to use a loan broker to get access to more quotes. The best thing to do is get a quote from at least one broker, and go direct to two or more banks who offer this type of loan, but who do not operate via a broker. In this way you get the best of both worlds – the reach of a broker, and the handful of deals they cannot access.

 

Finally, remember just to get a quote in principal – do not let anyone do a credit check yet at this will harm your credit score, potentially making the rate available to you worse. Only when you know what the best rate will be should you get credit checked by that lender.