A loan is borrowing money from one entity, organisation or individual; a debt given by a bank or another entity for a certain interest rate that is stipulated in a contract between the two parties. This contract may include details about the interest rate and the date and time that will repay the borrowed money. In a loan, a borrower receives a certain amount of money from the bank and is required to return at a certain date. This loan has a cost and this cost is interest on the borrowed money and all these details are stipulated in the loan agreement.
Why Apply for a Loan?
There are a few reasons why you should apply for a loan. Borrowing money from a bank to buy a car could be cheaper than the car dealer finance, for example. You can also apply for a loan to consolidate your debts together and could help you to keep them under control. If you want to improve your home you could also apply for a loan and make your like better. Of course, there are many other reasons you could get a loan for but this is different from individual to individual.
If you think to buy yourself a car or you need some items in your house, like a sofa or a tv or maybe you just want to go on a vacation. For many people, this cost can not be covered by the regular income. To cover these expenses you need to borrow money from a financial institution. The personal loan is different from a credit card because it can get you a fixed amount of money for which you pay an interest and you know how much you have to pay each month. With a personal loan you can borrow up to £25,000 and if you want more you will need to put up a property as a security measure.
If you borrow more money, the interest will be smaller and so it is maybe better sometimes to borrow more to have a lower interest. Normally the banks and the financial institutions borrow money for one, three or five years. The higher the repayment period, the interest rate will be lower. Very important for the rate you pay is your credit score. When applying for a personal loan, most of the financial institutions will check your credit score and if you have a poor credit history you could get a refusal from the bank. You will see below an example of how to apply for a personal loan from Santander Bank.
EX: How to Apply for a Santander Personal Loan
Apply By Phone
Apply in Person
Step 1 – Go to Santander Main Website
Let’s say you want to get a Personal Loan for your home improvement and you have decided to borrow the money from the Santander Bank. The first step you need to do is go to the main Santander Bank website, then go to Personal, Loans and Home Improvement.
Step 2 – Read the Eligibility Conditions
To apply for a personal loan from Santander so you can improve your home you need to meet some conditions:
- you need to be at least 21 years old
- you must be a UK permanent resident
- you need to have a gross income of at least £6,000
- you must have a bank account with the Direct Debit facility
- you need to not have been declared bankrupt in the past 6 years
Step 3 – Prepare the Loan Documents
To apply for a personal loan from Santander Bank regarding a home improvement you will need:
- your address in the last 3 years
- your employer’s address
- your monthly income
- your bank details
Step 4 – Review the Loan Rates
Before applying for the personal loan you need first to be informed of what your monthly repayments will be. If for example, you are a new or existing customer of Santander, for a loan between £15,001 – £20,000 your APR will be 3.6%. If you borrow from £1,000 to £2,999, your APR will be 20.6% and so on as you can see from the picture above. With a personal loan from Santander you will get fixed repayments for life on the loan you get, an annual loan statement, the possibility to check your loan online, you will have the opportunity to overpay at no extra cost and even to borrow more.
Step 5 – Personal Loan Terms and Conditions
When you apply for a Santander personal loan you need to know some terms and conditions. You will have to pay each month a fixed amount that will be deducted by Direct Debit. You will see how on the credit agreement how much you will have to pay monthly. If you missed a monthly payment you need to know that this could damage your future credit history. If you’ll miss multiple repayments, the debt could be secured against your house and to avoid this situation you need to contact the bank as soon as possible. If you change your mind the 14 days cooling period, you can cancel your contract.
Step 6 – Apply for the Personal Loan
When you are ready to start the application for your Personal Loan with Santander just click the Apply Button and you will be taken to the application page. On the first page, you are reminded once again that you need to be at least 21 years old to apply to meet the other requirements such as to have a permanent address in the United Kingdom. You need to complete the information about you such as First and Last name, Date of birth, mobile and home phone number and employment status. On the employment section, you need to fill information about where you work and what is your job title, your employer’s phone number, and other details.
Examples of Other Loans
Borrow Money for a Car Loan
The maximum amount allocated for the purchase of a car is the first step in choosing a car. The maximum amount a person can borrow is directly proportional to the monthly income (individual or family level, as appropriate). Banks can set their individual thresholds of indebtedness. They accept that people with higher income, to have a higher monthly rate. The income taken into account by banks to extend credit is determined by deducting living expenses from total income earned by the customer.
The level of these costs is determined on a case by case basis for each client, depending on the number of family members. In assessing the repayment capacity, most financial institutions also take account of the salary and other income, such as those from independent activities, or rent. Unlike other loans, car loans bring with them a number of additional costs. The customer must also consider that a car requires fuel costs, maintenance, and insurances.
Loans for Young People
When you are young it’s harder to borrow money from banks. If you are a student, then it will be very suitable for you to apply for a student loan. It is important not to heavily indebted so you can pay the monthly rate, so be careful how much money you borrow. Being young, you don’t have a credit history so it will be difficult to get a loan. That does not mean that the bank will not give you the loan you need, but it will be much harder to get it. As a young man will have to improve your credit score in order to make it easier for a bank loan later. One of these possibilities for the improvements of the credit score is to register to the electoral roll.
Debt Consolidation Loan
If you have already balanced your credit cards or overdrafts, you could apply for a loan to consolidate all your debts in a single repayment at a fixed rate. You will be able to save money if your new personal loan rate will be lower than your existing rates and you will simplify your repayments in just a single amount. To apply for such a loan you should meet some requirements: to be at least 21 years old, to be a UK resident, to have a bank account with a Direct Debit facility and to have an annual income of at least £6,000 and to not have been declared bankrupt in the last 6 years. This is just an example, conditions may be different from bank to bank.
Special Occasion Loan
If you have an important event coming in your life like a dream wedding, or a special occasion or the holiday of your lifetime, you could apply for this type of personal loan. With this type of loan, you will know what you will pay over a period of 12 to 60 months and normally your first repayment will be after 30 days from the moment the loan is agreed. For example, if you borrow let’s say £10,000 you will have a monthly repayment of £180 over a loan term of 5 years at a fixed rate of 3.1% so you will repay £10,806. This is just an example and the rates may be different with each financial institution. Most of the banks require for this type of loan to be a UK resident, to be at least 21 years old and to have a good credit history.
Apply for Santander Loan by Phone
If you don’t want to apply online you can do it by the phone. To get in contact with a customer service person regarding a loan, please call Santander Loan Telephone Number 0800 028 4055 and a person from the support team will guide you through the whole loan application process.
Apply In a Santander Branch
You have also the possibility of applying for a personal loan in a Santander Branch. To do that click the Branch locator and enter one of the following details: your address, postcode, town and county.