Payday loans. Guarantor loans. Unsecured loans. Peer-to-peer loans. Overdrafts. Debt consolidation loans. Secured loans. There are so many types of personal loan that it can all get a little bit confusing and overwhelming.
With so many types of personal loan, which one is right for you?
We’ve decided to make it a little easier for you.
Remember those quizzes you used to do as a kid – the one’s where it’d say ‘If you answered mostly A’s, you’re definitely the coolest member of your friendship group’ or ‘If you answered mostly B’s, you’re a Mutant Ninja Turtle’? (No? Just me?).
Well, wouldn’t it be handy if you could fill out one of those quizzes that sorted through the types of personal loan and found the option that suits you best?
Now you can.
Presenting the Bamboo ‘Which type of personal loan is right for me?’ Quiz:
(Maybe grab a pen and paper to note down your answers – it’ll make it a lot easier than trying to remember a combination of 7 letters in your head.)
Disclaimer: Before we begin, obviously, this quiz can’t give you detailed financial advice. If you need detailed financial advice on which type of personal loan is right for you, make sure you speak to a qualified professional.
Let the quiz begin!
Question 1: What are you hoping to borrow the money for?
A. To tide you through until payday and act as a bit of a safety net
B. A big purchase or expense (for example, a car or home renovations)
C. To pay off existing loan and credit card debt
Question 2: How much are you looking to borrow?
A. Between £100 and £1,000
B. Between £1,000 and £8,000
C. More than £8,000
Question 3: How long are you looking to borrow the money for?
A. Less than a year
B. Between 1 and 3 years
C. Longer than 3 years
Question 4: How is your credit score? (If you don’t know, here’s our guide to finding out for free.)
A. It’s OK, but it could be better
B. It’s not in good shape, honestly
C. It’s pretty good!
Question 5: How are you hoping to pay off your loan?
A. As and when I can – but hopefully in one go, once the money is in my account
B. A regular payment every month over a fixed term
C. In a way that fits around all of my other repayments
Question 6: Do you have somebody that might be able to help your application by being a guarantor?
A. I do, but I’d rather do it on my own, if possible
B. Definitely – I can think of a few people that might be able to help
C. Unfortunately not
Question 7: Which of the following would you rather use to apply for a loan?
A. My local bank
B. A specialist loan company for people in my situation
C. Anybody who might be able to help
That’s it. Pens down – the test is over.
Have you made note of your answers? Good. Onto the results…
If you got: Mostly A’s
The fact you got mostly A’s suggests that, of all of the types of personal loan, the one that suits you best would be an overdraft on your current account. Overdrafts are great for acting as a safety net – if you get tight for money as it gets close to payday, overdrafts can be the perfect solution for cost-effective, short-term borrowing. They’ll also help shield you against missed payments, which in turn protects your credit score.
You can find out more about overdrafts in our guide.
If you got: Mostly B’s
The fact you got mostly B’s tells us that, of all of the types of personal loan, a guarantor loan would suit you best. Guarantor loans are a great choice especially for people with no credit or bad credit ratings because having a friend or relative guarantee your repayments lets you borrow money at better rates than you would normally have access to.
Not sure what a guarantor loan is? Get yourself up to speed with our handy guide to guarantor loans.
If you got: Mostly C’s
If you got mostly C’s, then you could probably choose from a couple of types of personal loan – but we think that your best option is the debt consolidation loan. You can combine all of your monthly payments into one manageable amount, pay off all of your other debts and begin to improve your credit score.
We’ve wrote a blog post about the pros and cons of debt consolidation loans not long ago – if you’re considering applying for one, why not check it out?