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How to apply for and switch personal loans

This guide on how to switch loans outlines how to apply and switch loans online.

Here's our step-by-step guide to applying for or switching personal loans:

Compare loans

Before applying for loans, the first step is to compare loans, and make sure you're getting the best one for you.

LowerMyBills can help you compare all types of loan, whether you need a car loan, home improvement loan, consolidation loan, business loan – or a loan for any other reason.

Provide information about yourself

You don't need much to apply for a personal loan. You'll need to decide:

  • Between a secured loan and an unsecured loan
  • How much you want to borrow
  • How long you want to borrow it for

You'll need to give certain pieces of information, which lenders will use to decide whether to lend to you (and how much interest to charge you in some cases – the better the credit risk you seem, the lower the interest rate you'll be charged).

If applying for a secured loan

You'll need to state:

  • Why you need the loan
  • Whether you're a homeowner
  • Details of your property (its value, how much your mortgage is)
  • Your age and marital status
  • Details of your job and income
  • What other borrowing you have or have applied for
  • Details of any missed borrowing payments, County Court Judgments, Individual Voluntary Agreements or bankruptcy

If applying for an unsecured loan

You'll need to state:

  • Why you need the loan
  • Whether you're a homeowner
  • Details of your property (its value, how much your mortgage is)
  • Your employment status
  • Details of any missed borrowing payments, County Court Judgments, Individual Voluntary Agreements or bankruptcy

Sign the application

That's pretty much it as far as applying for a loan.

You'll be sent a credit agreement to read and sign. Make sure you do check it – it will explain any fees for early repayments, for instance, in case you want to switch loans in the future.

The money will be paid directly into your bank account. You should be sent a direct debit form to make repayments automatically.

Repay your old loan

You may be using the loan to consolidate other borrowing, or just switching to a cheaper one mid-loan.

If so, contact your current lender. Find out what the charges will be to repay the existing loan and how much you still owe.

For many loans, there won't be a charge – and even where there is, it will be much less (typically well under £100) than the amount you can save by switching to a cheaper loan.

Once the new loan is paid to you, use it to repay your old one.

How to apply for and switch loans brought to you by LowerMyBills from Experian

The LowerMyBills guide to how to apply for and switch loans is a step-by-step guide to applying for or switching personal loans, so that you have the information you need to make the right decision when you apply for loans online or plan to switch loans.


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