Representative 535% APR.
What are personal loans?
You want to borrow some money. It could be to fix the broken boiler, repair the car, or a 101 other things. You know you want a loan. You probably also know how much you want to borrow. But you'll find a bewildering number of options when you search online.
Personal loans, secured loans, payday loans, guarantor loans, short term loans and even personal loans for bad credit. What was supposed to be easy has suddenly become more difficult. But we can help break it down for you.
There are basically two types of loan:
- Personal loans
- Secured loans
A secured loan is 'secured' by something of value (collateral). If you don't repay the loan the lender will take the collateral as payment. The most common types of secured loans are mortgages and car loans. Satsuma don't offer secured loans.
A personal loan is different because you don't put up any collateral. In other words they are 'unsecured'. When you're looking to borrow money you're usually looking for unsecured personal loans.
Try our loan calculator
Why choose Satsuma for a personal loan?
SmartCheck is a tool you use to see if Satsuma will approve your loan application without affecting your credit rating*. It only takes a couple of minutes and you just need to answer a few questions. You get the results instantly.
SmartCheck will tell you:
- If you are eligible for a Satsuma loan
- How much we are willing to lend you
Once you have the feedback from SmartCheck you can decide whether you want to apply for a loan from us. Only when you actually apply for a loan will we carry out a credit check. You can find SmartCheck here.
How does SmartCheck work?
We check your info
It's not a full application so we only need a few details
Protect your credit score
No matter the result, it won't affect your credit score unless you choose to apply
Give you your result
You'll find out in 60 seconds and we'll tell you how much you could borrow. We'll need to check your details if you choose to apply*
How do personal loans work?
With a personal loan you borrow a lump sum from a lender, this could be a bank or an online provider, and agree to repay the money by instalments over a set period of time. The amount you borrow will be increased by the interest the lender charges and there may also be additional fees as well.
At this point we should point out personal loans are different from credit cards. Credit cards have no fixed payments and no set repayment period. Your repayments depend on the end of month balance. This is revolving credit. But with an unsecured personal loan you have a fixed number of repayments to pay off your debt.
So we've answered the 'what are personal loans' question we posed at the top of the page. But let's look at the other things you need to know before borrowing money or looking for personal loans online.
What are the different types of personal loans?
As we mentioned above there are many different types of personal loan. Or at least there are several different labels lenders use for their loans.
We'll look at the different types of unsecured personal loans you can apply for.
Short term loans
These loans are often smaller amount. You usually repay the loan over a period of months, usually a maximum of 12 months. Satsuma is a short term personal loans provider.
Bank or building society loans
Personal loans from traditional high street lenders are dependent on your credit score. Banks will look for a high credit score. Loans from high street banks tend to be for larger amounts, usually over £5,000, and repaid over longer periods, such as three years for example.
Loans arranged through banks and building societies can also often be processed online, but it may take a few days to receive the money if you're approved. Satsuma can pay out your loan in 60 minutes.**
This type of loan is different to others we've discussed. In order to get one of these loans you must have a guarantor. This is someone who guarantees to repay the loan if you're unable to.
This type of loan is often available to people who may have had credit issues in the past. You of course need to find someone who is willing to take on your debt should you default on the repayments.
Satsuma short term loans do not require a guarantor.
Payday loans have had some very bad press. And as a result of this, they have received added scrutiny and extra regulation in recent years. As the name suggests these are very short term arrangements. They are usually repayable in 30 days as a lump sum. This could potentially leave you having to repeat the process again the following month creating a cycle of debt which is hard to break.
You can apply for personal loans online. Bank loans can be an exception as you may need to sit down face to face with an advisor. But with lenders like Satsuma you can apply for personal loans online. These types of loans are faster to apply for, usually don't require paperwork and they can be approved within minutes.
Credit union loans
There are credit unions throughout the UK. They are usually community based but sometimes can be found in churches or trade unions. Credit unions are non-profit organisations. They encourage members to build up savings. But if you're a member of a credit union you can also apply for a loan from them.
Can I get a personal loan with bad credit?
There's a misconception that those with a poor credit history are unable to get a loan. Or the only loan they can get is a hugely expensive payday loan. But this isn't necessarily the case. Even though you will have to agree to a credit check.
All lenders will run a credit check on anyone who applies to them for a loan. They do this for two main reasons.
The first is to prevent fraud. They need to know you are who you say you are. The lender will check your name and address against a number of sources, including the electoral roll. This is why it's so important to be on the register.
The second reason is to check your credit history and credit score. A high street bank is unlikely to approve your loan application if you have a poor credit history and low credit score.
At Satsuma we consider everyone's application, because we know a credit score doesn't say everything about a person. We want to help and if you can afford the repayments we may be able to offer you a loan even if you have a poor credit history. Click here for more details.
Does Satsuma offer personal loans?
We offer short term loans. With Satsuma you could borrow up to £1,000 (subject to affordability) and you can choose to repay the loan over any period between three to twelve months. You also have the choice of whether to pay your instalments weekly rather than monthly if you wish.
Before you apply for a loan you can see exactly how much the loan will cost. Just use our loan calculator.
You can move the sliders on the calculator to change the loan amount and the repayment period. The calculator will work out the interest and total amount repayable. You can also see how much your instalments will be. You can also use the calculator to see how much your repayments will differ if you choose weekly rather than monthly instalments.
An important point to realise is the total amount of your loan is what you will repay. With Satsuma there are never any extra fees to add onto the cost of your loan. This isn't the case with some other lenders. You could be charged arrangement fees and late payment fees. There could also be other unwelcome surprises hidden in the small print.
But, here at Satsuma we will never charge you additional fees. Even if you miss a payment.
And don't worry. Even if you've had credit problems in the past you can still apply for a short term loan from Satsuma. You can apply here.
But we understand you may be reluctant to apply if you think you may fail a credit check. To put your mind at ease you can use Satsuma's SmartCheck.
What happens next?
When you apply you will receive an instant decision. If approved your cash can be in your account within the hour.** You can monitor your account by using the online MySatsuma portal or download our app and securely manage your loan from your smartphone.
* Approval for a Satsuma Loan is subject to successful completion of affordability, fraud, identity and money laundering checks. Satsuma Loans are only available to UK residents who are at least 18 years old and have a valid UK bank account and debit card.
**Once approved, hourly pay-outs between 6am-11pm.