Online Loans – Apply Online For A Quick Decision

In the past, if you wanted to apply for a loan, you may have had to attend a branch in person.
Nowadays, modern technology makes it more convenient for borrowers to search for the right loan online, whenever and wherever they are.

What is an online loan?

As the name suggests, an online loan is a type of loan which you apply for online. This means you can search for a suitable option and complete an application from the comfort of your own home or on the move, at a time that suits you, using either your mobile phone, a tablet, or laptop.

Little Loans is a credit broker, working with a large panel of over 30 trusted and responsible lenders. The majority of our lenders make it possible for you to apply for a short-term, personal loan entirely online, although a small number may ask that you finalise your application in branch.

How much money can I borrow with an online loan?

With Little Loans, you can search for a loan from £100 to £10,000 with repayment options from 3 to 60 months.

How much money you’re approved to borrow will depend on your personal financial situation, previous borrowing history, and choice of lender.

Can I get an online loan with bad credit?

A less-than-perfect credit score could mean that the range of lenders and financial products available to you is more limited, but that doesn’t automatically mean that you won’t be eligible for an online loan for bad credit. Little Loans works with several lenders who specialise in loans for people with bad credit, and they could be willing to consider your application.

If you’re worried about your credit score, you can check your chances of approval before you apply, using our free eligibility check tool.*

*Using our eligibility checker will not harm your credit score. However, if you’re matched with a loan and choose to make a full application directly with the lender, a creditworthiness assessment will be carried out and this could include a hard search. A hard search will be visible on your credit file for up to 12 months, and undergoing multiple hard searches within a short period of time will have a negative impact on your credit score.

What’s the difference between a direct lender and a credit broker?

We’ve outlined the key differences between applying for an online loan with a direct lender and searching for a loan with a credit broker.

Applying for an online loan with a direct lender

When you apply for a loan directly with a lender, they are only able to check your eligibility for their product(s). When you fill out an application form, they will complete a creditworthiness assessment, which will include either a hard search or Open Banking.

As mentioned above, a hard search will remain on your credit file for up to 12 months. If your direct lender application is turned down, you might think about applying again elsewhere, and so on, until you find a lender willing to accept you. This could result in multiple hard searches being carried out, all of which will be visible to each new lender who views your credit file. Multiple hard searches within a short period of time could signal financial difficulties and will damage your credit score.

Searching for an online loan with a broker

Using a credit broker, like Little Loans, could help to save you time, as well as protect your credit score from multiple hard searches.

A credit broker will use the details provided on your application form to scan multiple lenders at the same time for a loan that could be suitable for you, based on your financial circumstances. This is usually done using a soft search, which won’t leave a mark on your credit file.

If the credit broker is able to match you with a lender, you can choose whether you want to make a full application. Should you opt to go ahead with the loan that’s been found for you, the lender will complete a creditworthiness assessment, which will consist of a hard search or Open Banking.

Search for an online loan with Little Loans

Our online form can be filled out 24 hours a day, 7 days a week, quotes are no-obligation, and our service is completely free to use.

1. Tell us how much money you need to borrow, and how long you’d like to repay it over. Our online form should take no longer than five minutes to complete.

2. We’ll run a soft search with no impact to your credit score and scan our panel of lenders for a suitable loan. This will take approximately 60 seconds.

3. If we’ve matched you with a loan, you’ll be redirected to the lender’s website, where you can find out more and decide whether you’d like to make a full application.

4. The lender will run a creditworthiness assessment as part of their decision-making process. This will include a hard search or Open Banking.

5. If the result of the creditworthiness assessment reveals that you meet the lender’s criteria, and you’d like to go ahead with the loan offer, your lender will let you know when you can expect your money to be sent.

Important: you will be sent a credit agreement which will include the terms and conditions of the loan, as well as your repayment schedule. You should make sure that you’re happy with everything before you choose whether to sign and return the agreement.

What’s Open Banking and can it be done online?

Open Banking is a financial process used by a range of authorised third parties, including lenders. It is carried out entirely online.

With your consent, your chosen lender will be granted read-only access to your online bank account, which will enable them to view your recent financial transactions. Please note that third parties cannot make any changes to your account, or take any money without your consent, and you can withdraw permission at any point.

Open Banking provides lenders with the opportunity to gain an insight into your recent financial situation, rather than relying on your credit history, which may not give an accurate representation of how you currently manage your money.

If approved for an online loan how quickly could I receive the money?

If you’re happy to agree to both the offer and the terms and conditions of the loan, your money could be sent the same day as your application is approved. Please be aware that every lender will have their own payout timeframe, and the time it takes for the money to become available in your account will depend on your bank’s policies and procedures.

Things to think about before searching for an online personal loan

An online loan could be a suitable option to help bridge the gap in the event of a financial emergency that your savings don’t quite stretch to cover. A short-term loan allows you to spread your repayments across a certain number of months or years, which could make the cost of borrowing more manageable for you.

Before you go ahead and search for a loan, it’s crucial to understand that a loan is a serious financial commitment. You should only make an application if you’re absolutely certain that this is the right choice for you and that you can comfortably afford to make your monthly repayments. You should also understand the impact that a loan will have on your credit score. We’ll look at this in a bit more detail in the next section.

Will applying for a loan online affect my credit rating?

It’s important to bear in mind that any financial product you have, such as a loan, credit card, or mortgage, will affect your credit rating.

All Financial Conduct Authority (FCA) authorised and regulated lenders in the UK must run a creditworthiness assessment on anyone who applies for credit. As discussed, this will include either a hard search or Open Banking. Too many hard searches in a short period of time will cause your credit score to decline.

Your credit score will also suffer if you make a late repayment or miss one altogether.

If, on the other hand, you make your loan repayments in full and on time each month, you could see an improvement in your credit score. This will depend on whether you have managed any other credit commitments in the same responsible way.

Which lender offers the best online loans?

The best lender for an online loan is completely down to you and what suits your situation. What’s best for one person may not be right for someone else.
When searching for the best lender for your online loan, you should consider the following:

• The amount of money you need to borrow.
• Your ideal repayment term.
• Your credit score. For example, if you have poor credit, you might have a better chance of approval if you apply with a lender who specialises in bad credit loans.
• The Annual Percentage Rate (APR). This reflects the annual cost of borrowing the money and includes interest and any standard fees. The lower the APR, the less the loan will cost you in interest.

If you find a lender that meets your ideal requirements for an online loan, you may wish to make an application. Alternatively, you could use a credit broker, like Little Loans, who are able to scan a panel of lenders to search for a suitable loan for you.

How long can I borrow an online loan for?

Little Loans makes it possible for you to search for an online loan with repayment terms from 3 to 60 months, depending on the amount of money you apply to borrow.

What can an online loan be used for?

People often apply for a personal, short-term, online loan to help them through an unplanned financial expense that they’re otherwise struggling to cover. This might include urgent home improvements, costly dental treatment, or an unexpected bill.

Are online loans safe?

Searching for an online loan with Little Loans is safe; we, and all the lenders we work with, are authorised and regulated by the FCA.

Before you share your details with a credit broker or lender, you can check to see whether they appear on the FCA register. Any company or individual that does not appear on the FCA register is unlikely to be working inside of FCA guidelines, which means that your money will not be protected if something goes wrong. You could even be at risk of fraud and scams. You can read our guide to spotting potential loan scams here.

Do I need a guarantor for an online loan?

Not necessarily. You might prefer to apply for a guarantor loan, in which case, you can look for an FCA-approved specialist lender of guarantor loans online.

You do not need a guarantor to search for a loan with Little Loans. Little Loans do not work with any lenders who offer guarantor loans.

Are online loans secured or unsecured?

An online loan could be either secured or unsecured, depending on the type you apply for.

When you apply for a secured loan, you secure the loan against an asset, such as your car or home. This is called ‘collateral,’ and if you default on your repayments, the lender is within their right to repossess the asset to recoup their losses.

You do not have to provide collateral for an unsecured personal loan.

Little Loans currently only work with lenders of unsecured loans.

What happens if I can’t afford to repay my online loan?

If you fall into financial hardship while repaying your online loan, it’s best to contact your lender as soon as possible and let them know about your situation. They might be able to offer a solution to help reduce some of the pressure.

Worried about money?

Free, confidential financial and debt advice can be accessed through the following sites: StepChange, MoneyHelper, Citizens Advice, and National Debtline.