Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk.
Representative Example: Amount of credit: £800 for 12 months at £132.16 per month. Total repayment of £1,585.87. Interest: £785.87. Interest rate: 150% pa (fixed). 279.1% APR Representative.
The cost of a loan tends to be based on factors that include the borrower's credit, the length and amount of a loan, and whether or not a loan requires collateral. When one talks about a "cheap" loan, they're talking about one in which the lender is comfortable charging less for credit based on those factors.
For instance, a customer with a high credit score will have a history of repaying their debts on time. A lender will be more likely to believe that they will make their repayments in a timely fashion, and they will then be able to offer lower (cheaper) interest rates. On the other hand, borrowers with lower credit scores will tend to be charged higher interest rates, making it relatively more expensive to borrow money.
Shorter and smaller loans also tend to have higher interest rates, but because they last a shorter time, they wind up costing less than larger loans with the same interest rate.
Finally, borrowers who offer up collateral — something of value that a lender can seize if the loan isn't repaid — can get lower interest rates because the lender is assured of getting something, even if the borrower defaults.
Our instalment loans have a Representative APR of 279.1%. Though this rate is not considered cheap compared to most loans from banks, if you have trouble getting lower interest rates, there may be good reasons for you to consider taking out a loan with us.
For instance, bank overdraft fees can quickly compound, costing you a lot because of a small mistake. Getting the cash to make up a bank account shortfall can save you money in the long run if the charges you would have incurred are less than the cost of your loan.
Similarly, losing your job because your car broke down is potentially far more costly than the interest associated with one of our loans. Getting the funds you need to afford repairs ensures that you'll still have access to your source of income.
Pounds to Pocket offers instalment loans up to £2,000, repaid over 6 – 12 months. Our application process is simple and straightforward, and we look at your entire financial situation, meaning you don't need perfect credit to be approved.† And if you ever run into any issues, our dedicated customer support team is here seven days a week to answer your questions via phone or email.