Personal Loans

Personal loans can be used for a range of things. Some common uses include:

• Consolidating your debts
• Home improvements
• Buying a car
• A wedding
• Other large purchases

Dependent on the provider, there are some things you typically can’t use your personal loan for, such as gambling, investing, or any illegal activities.

Taking out a loan is a commitment and should be considered carefully before doing so.

To apply for a personal loan with Ocean, you must be a UK citizen residing in the UK, and at least 18 years of age.

Application requirements vary depending on the lender, but typically, you would need:

• Proof of identity
• Proof of address
• Evidence of your income and expenditure 

If you are considering taking out a personal loan, ask yourself:

• What would the money be used for?
• How much do you want to borrow?
• How long should the loan run for?
• Do you want the ability to make overpayments?
• Interest rates can be higher than other types of credit, e.g. homeowner loans
• Some personal loans have variable interest rates, meaning the rates can change
• Late or missed payments can harm your credit rating, so make sure they’re manageable

At Ocean, our personal loans range from £1,000 up to £15,000. The exact amount you can borrow will be determined by your personal circumstances.

Depending on the amount you borrow, you can choose to repay your loan over 1 to 5 years.

Alternatively, a homeowner (secured) loan can run for a term of 3 to 30 years.

A shorter term means that you can pay off your loan quicker, but you’ll have higher monthly repayments.

A longer term allows you to spread the cost further, meaning lower monthly repayments. However, as a result, you are likely to pay more in interest overall.

An APR (Annual Percentage Rate) represents the total cost of borrowing to the customer over a year. It’s shown as a percentage and includes all interest and charges, for ease of comparison.

The interest rate you receive is based on your personal circumstances. Loan rates are different depending on the lender, as each one will look at how well you’ve managed your money in the past to decide how much you can borrow, for how long and at what interest rate. 

There may be options for you to pay off your loan early if the terms and conditions allow, but there might be additional charges and fees incurred if you do so.

As with any type of credit, a personal loan can either help or hinder your credit score.

If you take out a personal loan and stick to making your repayments on time each month, over time it can improve your credit score, show you’re a responsible borrower and can give you access to better rates or deals in the future.

However, if you do not keep up with your repayments or pay on time, it can have the opposite effect. Missed or late payments can leave a negative mark on your credit history, making it harder to get credit again in the future.

It’s a good idea to set up a standing order or Direct Debit for your repayments, to make sure they’re paid on time each month.

No. While a good credit score increases your chances of being accepted, each lender has their own criteria and will consider other factors in addition to your credit score. These may include:

• Employment history - How long you have worked in your current and past roles
• Income - How much you earn
• Debt-to-income ratio – What you owe compared to what you earn
• Credit history – Whether you have previously missed or deferred on payments
• Residential status – Whether you rent, mortgage, or own your home

This said, you may want to read more about how you can improve your credit score before applying. There are also other benefits to having a better credit score, including access to higher loan amounts and lower interest rates.

To improve your chances of being accepted for a personal loan, you should consider the following.

1. Use eligibility checkers

This way, you can check your eligibility to see whether you will be approved before you apply. Making multiple applications in a short period of time can harm your credit rating, but an eligibility checker won’t.

2. Take steps to improve your credit score. This can be done by:

Initially, you’re likely to receive late payment fees, but if you miss several repayments, this will turn into a default, which can severely harm your credit score.

Following a default, the lender may take further action to reclaim the money owed. This could lead to County Court Judgments (CCJs) or debt collectors becoming involved.

If you’re struggling to keep up with repayments, it’s best to speak to your lender as soon as possible.

If you're struggling to meet your repayments, get in touch with your lender straight away. Let them know your situation as they may have options to assist with both short and long-term difficulties you might be facing. These could include:

• Payment breaks
• A change in payment dates
• A renegotiation of your loan terms

In addition to speaking with your lender, you can also seek free independent support from the following organisations:

• Citizens Advice
• Money Advice Service
• Money Wellness
• National Debtline
• StepChange