Most lenders use a simple calculator to determine how long it will take you to pay the full amount of the installment and your APR [annual percentage rate]. This is usually one of the first things you need to do after you decide to borrow money from an official lender.
If you are considering borrowing money, you need to decide whether to choose a secured loan or an unsecured loan. While mentioning anything that is "unsecured" can upset many people financially, this type of lending is actually a better option for most people.
More importantly, if you don't own your own home [that is, you rent], unsecured borrowing is the only option you will have, as the property does not belong to any of your borrowings. Although a secure loan can be repaid over a long period of time [for decades, such as a mortgage], for a smaller amount, no guarantee is the best option.
Personal loans are usually between £500 and £25,000. Eligibility usually depends on your credit rating, but if you know that your credit history is flawed, some lenders will consider your application without a credit check in your personal circumstances.
In this case, the loan company will usually ask you to provide proof of monthly income to ensure that you can afford the repayment. They may ask for a bank statement, payment slip or contact your employer directly to find out where you work and get the salary you announced.
If you know that your lender will check your credit history, it is important to understand your position at the credit bureau. The best way is to use a free website like Clear Score. You will be asked to enter your personal details and answer some security questions, but then you will be able to access your credit file.
It's useful to know your score, especially if you plan to apply for a mortgage or buy a business in the future. However, this is not all but the end - some loan companies will consider your application without a credit check. Pay attention to the "poor credit" lender.
When using a loan calculator - either online or through your bank or lender - you will be asked how much you want to borrow. It's a good idea to spend some time figuring out this. Don't try to borrow a lot of things that you can't pay back. The calculator will help you stay within your capabilities.
You may be asked to explain the purpose of the loan. This could be anything to move, pay for a wedding or a merger. It's important to know what you plan to use to make money, because this will tell your lender's decision - although when money is deposited into your account, of course no one will check you!
The calculator will calculate your monthly payment, depending on how much you want to borrow and when to borrow. Personal loans can take up to six months to six years to repay - depending on how much you pay each month.
Orignal From: How to use the unsecured loan calculator
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