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Personal Loan

Definition
A personal loan – otherwise known as an unsecured loan – is taken out by an individual over a fixed term. This type of loan is available from a bank, building society or other financial institution without security. They are covered by the terms of the Consumer Credit Act. A lump sum will be loaned in return for you agreeing to make regular repayments, usually by direct debit.

Explanation
Personal loans are usually available from £100 up to £25,000 (security will often be needed for larger loan amounts) and are repayable over a set period of time by regular monthly payments, usually between six months and 10 years.

Poor Credit History

Definition
Poor credit history is also known as adverse credit or bad credit record. Credit records can be affected by a number of factors.

Explanation
A poor credit history can result from house repossession orders or repayment arrears on personal loans or mortgages. Most lenders take a person’s credit rating into account prior to offering a loan. A poor credit history may prevent a person from receiving the best credit terms.

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