Many lenders are reluctant to advance unsecured loans because of the risk aspect, a high proportion of people unfortunately default on unsecured loans, therefore lenders look for stability and follow a strict criteria.

Here's some of the criteria that most Lenders are looking for:

• You have had no more than two continuous jobs in the last three years
• You have had no more than two address in the last three years
• You are on a minimum of £5,000 salary per annum
• If you are under 21 years old, then your guardians may be required to counter sign your loan application
• You must have a bank account in your name, or a joint account  if your partner is applying as well
• If you are self-employed, then you need at least one years audited accounts
• Generally no benefits can be accepted as income except disability & incapacity allowance 

Applying

When you apply for an unsecured loan, you will have to provide various documentation. This is usually in the form of utility bills, passport, driving licence or birth certificate and a bank statement.

You must tell the truth about your circumstances from the outset as the lender will run a credit check; this will show all of your outstanding finance, address history, defaults, searches, arrears & CCJ's.  If you are found out not to be telling the truth, then the lender will simply decline you.

Unsecured Personal Loan Guide

Personal Loans are available in varying amounts and usually depend upon the purpose for which you require the loan. The amount borrowed usually varies from £500 upwards. The amount borrowed is usually repayable over a period of between one to ten years. Lenders charge interest rates on the amount borrowed. Their rates can either be fixed or variable. If the rate is variable, the rate changes with market forces and could change the amount you repay. Fixed rates offer more certainty but can be at a higher rate.

Depending upon your circumstances, Personal Loans can either be secured or unsecured. Secured Personal Loans have your property set against them as security for the amount borrowed. The interest rate on secured loans tends to be lower than unsecured loans but are not available to tenants. Personal Loans are repayable on a monthly basis at a fixed amount. However, some lenders offer the option of over-payments or under-payments that could assist you with your personal circumstances.

Lending institutions offer you the option of taking a Personal Loan either in person, via written application, over the phone, or on-line. Assessments can be made very quickly. Your income and financial commitment details are collated together to see whether or not you can afford to take on the Personal Loan. The suitability of the Loan itself for its intended purpose is also assessed.

Lenders use credit scoring facilities and credit reference agencies to assess your suitability. Credit Scoring assesses your personal statistics, for example your age and occupation and each statistic is given a score. This is to ascertain which broad category of borrower you fit into. Credit reference agencies provide a detailed analysis of your own financial position. In particular, any county court judgements, (C.C.J's) which you may have, details of previous credit searches against you and details held on the electoral roll about you.

If you are refused a Personal Loan or wish to make enquiries concerning your own credit file, you can apply to the credit reference agencies for a copy of your credit file. A small fee will be charged for this service. Details may be obtained from your lender. Learn about your credit file, credit scoring, applying for credit, identity theft and much more via our E-Book Even The Score.