- What makes flexible personal loans different?
- What to look out for in flexible personal loans
- How much can you borrow?
- Who can borrow flexible personal loans?
- How to get a cheaper loan
- Will it affect a mortgage application?
The Rise of Flexible Personal Loans
If you are already repaying a personal loan but are finding that the terms of the agreement are too restrictive there is now a trend for personal loans lenders to offer more flexible personal loans. Although many people are content with repaying a loan over the specified period, some would like more flexibility allowing them to save on instant personal loan interest rates by repaying the loan earlier but without being subject to punitive penalties.
Most personal loans lenders will charge between one and two months interest for borrowers who wish to make early repayment of a loan. But the latest offers being marketed allow for early repayment without penalties or with a limited amount of charges.
By comparing personal loans and choosing a more flexible option you can have more control over how you repay your borrowing. Go to a money advice website and compare loans that offer overpayments, payment holidays and early repayment options without extra interest charges.
Flexible Personal Loan UK Terms
Flexible personal loan lenders can give more adaptable terms, including;
- the amount of loan granted
- the interest rates charged
- fees for late repayment
Applicants wanting to borrow higher sums of money may feel restricted by the usual amounts on offer, typically £1,000 to £5,000, and may be looking for a larger sum but without wishing to take on a secured loan in the form of a mortgage.
Personal loans lenders are increasingly offering higher amounts as quick personal loans UK but, because there is less demand for these larger amounts, the interest rates charged are usually higher. Additionally, with some lenders, flexibility may imply that they offer a payment holiday at the start of the loan.
Note, lenders might offer flexible loans but ask a higher interest rate to offset the loss of revenue made by early repayment charges
Costs of Flexible Personal Loans
There are number of things to look out for when looking at the cost of different flexible personal loans.
- Early repayments fees
- Set Up Fees
- Interest Rates (APR)
- Extra Charges
A good flexible personal loans lender, will charge a specified amount for early repayment or will make no charge at all. Set up fees are usually only charged by some brokers. At Personal Loans Now, we believe that you shouldn’t have to pay for our introductory service. If your application is approved and you accept the loan agreement, you will receive your loan without being charged for it.
Finding good personal loans lender deals on interest rates is not hard as long as your credit record is good. But be aware that the larger amounts of borrowing do sometimes attract higher rates that the normal range of loans. Remember as well that the prices quoted in pre-approved personal loans often change once you actually apply.
Flexible loans may offer a payment holiday at the start of the loan which on first glance looks a good option. However, the extra interest for this holiday period will add to the total cost of the loan.
Flexible Personal Loans Borrowing Limits
In the past, personal loans lenders needed to keep to similar borrowing limits and of course, all loans are subject to status. That is, you will only get a loan if the lender deems you to be creditworthy and able to afford the repayments.
In 2016, the loans war heated up and now there are a number of lenders offering larger sums on unsecured personal loans. Applicants are taking up these offers in spite of paying a higher rate of interest. This is because the loans are faster to arrange and there is much less paperwork than that involved with a mortgage equity release loan.
The new loan ceilings go from £25,000 up to £50,000 and repayment periods stretch to seven years. As soon as the first mainstream lenders started this trend, others quickly leapt on the bandwagon. Now, well known banks are copying banks like Tesco and Sainsbury’s, both of which offer high amounts of personal loan borrowing.
Why Is There a Need for Higher Limits?
These new higher flexible best personal loan rates are particularly useful for people who are renting and who do not have a property to offer as collateral for a high value loan. Buying a car in the high end bracket is now within the reach of anyone who takes out a high value car finance personal loan. This type of loan could allow you to get the car of your dreams. Or, you could use the loan to finance a trip around the world.
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Online Flexible Personal Loans for Debt Consolidation
Personal loans lenders are increasingly offering larger amounts as a part of the trend for flexible lending. Could you use one as a personal debt consolidation loan? As already mentioned, interest rates for larger sums tend to be higher. But, you should take into consideration the overall benefits of borrowing enough money to pay off several smaller loans.
The main benefits are:
- A lower monthly repayment amount.
- Only dealing with one lender instead of several.
- The possibility of being able to repay earlier with no extra charges.
However, always take into consideration the exact cost of the loan if it runs to the full term. It is not possible to borrow enough to get out of debt. But, it is possible to make your borrowing more manageable and flexible.
Keeping up to date with the latest offers from a range of personal loans lenders is the best way to start your search for a flexible secured personal loan. There is plenty of financial advice in the regular press as well as on money advice websites.
Getting Approved For Flexible Personal Loans
Who is likely to be approved for flexible personal loans? As with most loans, the main factors are whether you can afford it based on your income and expenditures, and your credit history.
Affordability Checks for Higher Limit Loans
What matters to the lenders is the affordability of the loan. As long as you have proof that you can afford the repayments and that your credit record is good, you will be able to borrow up to £50,000 over the normal seven years period. However, you should approach these high value loans with caution.
The Interest Rate Depends on your Credit Rating
There is also the factor of interest rates to consider and some of the high loan amounts come at a stinging cost. Lenders are advertising the representative APR as something like 6.7%. However, someone with only a fair credit rating could expect to pay 14.9%, or even up to 37.9% for a bad credit personal loan.
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Most lenders have personal loan calculators which you can use to see what repayments would be. But, in truth the only way you will get to know what rate applies in your own personal circumstances is to apply. This will leave a footprint on your credit file and could deter other lenders in the future. This is especially true if you are applying for a high value loan.
One other factor to consider when applying for a large personal loan is where you will be in three or five years time. If there is any possibility of you wanting to get a mortgage to buy your own home, then taking out such a large loan might not be the right move.
Making the full repayments each month can help to improve a credit record. However, when you apply for a mortgage, all existing debt is taken into account. A large personal loan could limit the amount you may be able to borrow to buy a property. In this situation, you might have to resort to taking out a loan with a guarantor so that the bank will agree to give you credit.
Should I Consider Flexible Personal Loans?
The most important fact to think about when searching for a personal loan is that lenders are in it for the business. Yes, it is nice to have the flexibility to borrow more than the usual range of products and restricting early repayment penalties is also a good thing. However, all loans must be repaid, and all of them charge you for the privilege of borrowing. If you are currently unemployed, and might like to repay the loan more quickly when you find employment and begin to earn, a flexible loan could be particularly useful for you.
As long as you are aware of the pitfalls and advantages of borrowing through flexible personal loans and do not over extend the amount you can afford to repay, using a flexible personal loan can be advantageous when you need to borrow a lump sum. But remember, always look at the total and true cost of borrowing as well as the affordability factor.
Tip: Anyone who has a tendency to impulse buying should always allow themselves a couple of days cooling off period before applying for a large sum on a personal loans
Flexible Personal Loans
There are many advantages to flexible personal loans over other, more fixed types of loans. Personal Loans Now works with a fully FCA-authorised broker. With access to a huge range of lenders, we are perfectly positioned to help you find exactly the right loan for your current situation. Whether you are employed, self employed, or unemployed, whether your credit rating is perfect, dreadful or anywhere in between, whether you want £500 or £25,000 for home improvements or your wedding, we’ll do our best to help you. Apply now, and if approved, you could get the money in your account today!