20 August 2019
The world of personal loans can sometimes be a confusing one; from complicated phrases to the need to understand credit scores, it can be hard to keep up or to even know where to start when applying for a personal, short-term loan.
We regularly receive a range of questions from our customers, and when it comes to getting your head around the facts we’ve got you covered. As a starting point, here are of our 10 most frequently asked loan questions:
What is APR?
APR stands for Annual Percentage Rate. It's different from the interest rate in that it not only includes interest costs, but also any other fees related to a total loan cost. For loans that are shorter than 1 year, it is the cost of taking out that loan as many times as it will fit into a year, increasing the amount borrowed each time to pay off the last loan. Since this is an impossible scenario due to the laws about credit, this means that for loans shorter than one year, the APR doesn’t reflect what you actually pay or even what you would pay if you borrowed multiple times.
This APR figure can help you determine which loan is more suitable for you, but beware, the lowest APR may not always be the most suitable or cheapest choice for you. For loans less than a year, the only way to compare loans is to look at the total cost of borrowing for a certain loan amount.
Will my student loan affect my credit rating?
From a long-term financial point of view, student loan repayments do not directly affect your credit score. This is because they won’t show up in your credit report as they’re deducted from your future income automatically with a fixed percentage after graduation. Also, you only start paying it back when you earn more than £21,000 per-year.
What loan should I choose?
If you are looking for a short-term financial solution, where you require a relatively small amount of money (up to a maximum of £1,000) for a reasonably short period of time (up to 12 months) a short-term loan could be the ideal solution for you. Short-term, personal loans tend to have a faster application process compared to larger sum loans.
However, if you require a larger sum of money for a loan over a period of 12-months or more there are multiple providers, ranging from traditional high-street banks to independent providers with whom you may be less familiar. In order to compare all available options to you we would recommend that you take the time to do a thorough search and review of all available loan providers for the sum and period you wish to borrow over.
How much can I borrow for a personal loan?
The amount of money you may be able to borrow depends on the type and length of the loan you choose to apply and are approved for. With a buffa loan, we specialise in assisting customers who require a short-term loan solution and you can borrow a small sum of money, up to £1,000, over a maximum period of 6-months. These terms are very typical of short term loan providers such as ourselves.
If, however you are looking to borrow a larger sum over a longer period of time, you should seek an alternative borrowing option from a loan provider who is able to offer such loan sums and terms. Typically, such larger loan sums can range from £1,000 all the way up to £25,000.
Can I still get a loan with poor credit history?
The short answer to this question is, yes. Specialist loan providers such as ourselves will offer to potentially accept loan applications from applicants who have a poor or limited credit history. At buffa, we’re dedicated to treating all of our applicants as an individual and everyone who applies for a loan with us will be required to provide us with sufficient details that we can conduct an eligibility and affordability check against them. We cannot of course guarantee that every applicant with a poor credit rating will have their application accepted. However, we do look at each application on an individual basis and we will do our very best to offer a loan which is suitable and fair for each applicant.
What repayment options are available for personal loans?
Different loan providers may require loan repayments in alternative ways, however here at buffa, all loan repayments will typically be collected via a Continuous Payment Authority (CPA). This means that we will automatically collect from your debit card your regular scheduled monthly repayments on the dates which are confirmed within your initial loan agreement with us. We do also allow customers to make repayments to us directly via both telephone payments and bank transfer.
How long do I have to repay personal loans?
The length of time you have to repay your loan depends on the initial agreement you have with your loan provider. Typically, a loan repayment period for a UK personal loan can range from a minimum of 3-months all the way up to 5-years. This of course excludes Mortgage-related loans which will be over far longer periods of time, usually over 25, 35 or 40-years.
Buffa short term personal loans offer you the flexibility to apply for both the loan amount and the length of time over which you wish to repay (up to a maximum period of 6 months). Our loans have a minimum contractual term of 3 months; however, we do allow our customers to make full or partial early repayments at any time during the life of their loan with us which helps to reduce the total interest against their loan.
How long does it take to receive money for a personal loan?
Once you have applied for your loan, you will need to wait for it to be formally approved and accepted by the loan provider before you can expect to receive the funds. After full acceptance of your application and all relevant loan documentation has been seen and signed (usually via a digital signature) by yourself, you could receive the money in your account within as little as 5 minutes. However, this is dependent upon the individual loan providers policy.
At buffa, we aim to fund new customer loans within 5-minutes of full acceptance, but we cannot guarantee that this will take less than 24-hours as some banks are not currently part of the Faster Payments service.
What do I need to apply for a personal loan?
The information required for a personal loan application will depend on each individual loan provider; although many providers do tend to require the same type of information from each applicant. In order to apply to us, buffa loans require you to be a permanent UK resident, to be over the age of 18 and to have access to a UK bank account in your own name, with access to a debit card.
You will then need to provide to us specific personal details, such as your name and address, current employment status and income details, as well as details of your regular outgoings and your bank details.
How long will it take for my loan application to be approved?
The time taken to approve a loan application will vary depending on the individual loan provider and their specific application review process. At buffa, we’re proud to be able to provide you with an indicative loan application decision within approximately 1 minute of your application being fully completed and submitted online. However, we may need to carry out some further checks based upon the details you’ve provided to us in order to provide you with a final decision. Sometimes this process may take up to the next working day, but, as we check applications daily the weekend should not affect our final response time.
So, now that we’ve covered everything from APR to repayment options, we hope you’re now feeling more informed about some of the key questions we typically hear about the process of taking out a new personal loan.
But if you’re still looking for more loan information, either now or in the future, why not take a look at our FAQ’s page for some more useful information, or our How it Works page to learn more about the process of applying for a buffa loan. Alternatively, you can contact us for more information about a buffa personal loan.