Post Office Personal Loans

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What our Nerds say about Post Office personal loans

KRISTINA FOX WRITER

The Post Office is a centuries-old institution in the UK, providing postal services to millions of people across the country.

What’s more, the Post Office has also expanded into the financial services sector in partnership with the Bank of Ireland UK, offering products such as loans, credit cards, mortgages and savings accounts.

In particular, the Post Office acts as a credit broker for personal loans, also called unsecured loans.

Post Office personal loans

The Post Office offers personal loans to customers that meet its eligibility criteria. A personal loan is also known as an unsecured loan, which means you do not have to offer up security such as your home when you apply to borrow.

The Post Office is a credit broker, not a lender, so Post Office loans are provided by Bank of Ireland UK.

You can currently apply to borrow between £1,000 and £25,000 with a Post Office personal loan. Loan terms can range from one year to seven years, depending on how much you choose to borrow. Interest rates are fixed for the length of the loan term but can vary between applicants, depending on individual circumstances.

You may get an instant decision on your application when you apply online for a Post Office loan. If approved, you could receive the loan amount straight into your bank account the next working day.

» COMPARE: Personal loan rates

Post Office loan rates

Rates on Post Office unsecured loans are fixed throughout the term of the loan, which means they can’t go up or down while you’re repaying what you’ve borrowed.

The representative annual percentage rate (APR) shows how much it could cost to borrow a certain amount, including interest and any standard fees charged by the lender. While 51% of customers must be offered this rate or lower, this means that 49% of customers could be offered a higher rate or different terms. Representative APR can be used to compare loans but should only be used as a guide, not a guarantee.

Interest rates can differ between loan applicants. Your personalised interest rate is worked out using criteria such as how much you choose to borrow, how long your loan term is, and your credit history. The rate you’re offered after you apply – including interest and standard fees – is called your personalised APR.

Can I get a secured loan from the Post Office?

No, you cannot get a secured loan from the Post Office.

The Post Office offers personal loans. This is where you do not have to put up an asset, such as your house or other high-value asset, as collateral in case you cannot make repayments.

Pros and cons of Post Office loans

Post Office loans have advantages and disadvantages, depending on your individual circumstances.

Pros

  • an instant decision in many cases
  • online application form that takes a few minutes to complete
  • you could currently borrow up to £25,000

Cons

  • loans are not available to those with a history of County Court Judgments (CCJs) or bankruptcy – this applies to a number of other lenders, not just the Post Office
  • joint loans are not currently available

How do Post Office loans work?

With a Post Office loan, you can apply to borrow between £1,000 and £25,000, over a term of between one and seven years. You pay back the amount you borrow plus a fixed rate of interest over the term you agree with the lender when you take out the loan.

Can I make overpayments on a Post Office loan?

Yes, you can make extra repayments on a Post Office loan. You can make overpayments to pay off part of your loan early, or pay it off in full before the loan term is up.

If you want to pay your loan off in full early, you must request a settlement quote from the lender. You can do this over the phone.

It’s worth noting that for early settlement, the Post Office can charge you up to 58 days’ interest.

If you wish to make extra payments but not pay off the loan in full, you can call the Post Office to pay by phone using a debit card. After an overpayment, your loan term will be reduced accordingly, unless you give other instructions.

Can I top up a Post Office loan?

Yes, it is possible to top up or borrow more on a Post Office loan. You can borrow up to £25,000, including what you have already borrowed.

There are two ways of topping up your personal loan.

  • Replace your existing loan: You can replace your current loan with another, combining the current amount outstanding plus the extra you want to borrow, leaving you with one monthly repayment for the new amount. The interest rate and loan term may be different to your existing loan.
  • Take out a second loan: You can take out a second, separate loan from the Post Office that runs alongside your existing loan. You will have two repayments to make each month – one for each loan. Your interest rate and loan term will stay the same for your first loan but could differ for the second loan, depending on what you are offered by the lender.

You can get a quote online for additional borrowing without affecting your credit score. Additionally, you can apply to top up your loan on the Post Office website, and you will generally receive a decision immediately.

Will applying for a loan have an impact on my credit score?

While you can get a quote without affecting your credit score, applying for credit of any form, such as a loan, credit card or mortgage, will leave a hard credit check on your credit record. Lenders will be able to see that you have applied for credit.

Too many credit applications in a short period of time may harm your credit score or your chances of being accepted for a loan or another credit product. It’s a good idea to only apply for what you’re eligible for.

What can I use a Post Office loan for?

Unsecured loans can be used for a range of purposes, including large purchases or debt consolidation.

Car

You can use a personal loan to buy a new or used car. This is also sometimes called a car loan.

Post Office personal loans are unsecured, so the amount you borrow won’t be secured against the car you’re buying. This means the lender cannot seize your car if you can’t make your repayments.

Nevertheless, you should still be confident that you will be able to make all monthly repayments before taking out a loan.

Debt consolidation

A debt consolidation loan allows you to move your existing debts into one place, with one monthly repayment that goes towards all of them. This could make your debt more manageable, as you only have to keep track of one fixed monthly payment and one end date.

You can move different types of credit into a debt consolidation loan, including other forms of loans and credit cards.

Debt consolidation loans may not be suitable for everyone. It’s worth doing your research when considering different credit options. You can also contact a debt charity such as National Debtline for more advice on managing debt.

Home improvements

Personal loans can be used to pay for home improvements, whether it’s a new kitchen, a room redecoration or an extension.

Wedding

If you’re about to tie the knot, you could use an unsecured loan to pay for costs such as music and catering. This is also known as a wedding loan.

A loan could provide you with cash to pay suppliers up front. You would then repay this personal loan to the lender, plus interest and any fees charged.

Holiday

Planning a getaway? You could use an unsecured loan to pay for your holiday and spread the cost.

There are also other ways to borrow to pay for a holiday. For example, credit cards can offer protection under Section 75 of the Consumer Credit Act 1974, so you could claim back what you paid if your holiday is cancelled by the operator and it doesn’t offer you a refund

If you are looking for credit, it’s worth considering a number of options to find one that best suits your circumstances.

» COMPARE: Credit cards

Restricted uses

There are some things you cannot use a Post Office loan for. For example, you cannot use money you borrow to trade in cryptocurrencies or other ‘high-risk investments’ such as stocks and shares.

The Post Office terms and conditions also state that it cannot be used for business purposes.

» MORE: Business funding in the UK

Am I eligible for a Post Office loan?

To apply for a Post Office loan, you must:

  • be over 21
  • be a UK resident (and have lived in the UK for at least three years)
  • have a UK bank account with direct debit functionality
  • have a regular, annual income of over £12,000

You must not:

  • be over 70 when the loan term ends
  • have a bad credit record or history of bankruptcy
  • have any County Court Judgments (CCJs) on your credit file

Before applying for a loan with any lender or broker, you should assess your capability to make the repayments each month. This includes thinking about any life changes in the near future that could affect your finances, as well as the cost of living.

What credit score do I need for a Post Office loan?

There is no specific credit score that you need to take out a personal loan. However, the Post Office states that applicants should have a ‘good credit score’ to be eligible.

You can check your credit score through a credit reference agency, such as Experian or Equifax. If it’s lower than you expected, there are actions you can take to improve your credit score, such as registering to vote and making sure you pay all your bills on time.

» MORE: What is a good credit score?

Can I get a Post Office loan with bad credit?

You may find it more difficult to get an unsecured loan with bad credit. The Post Office’s eligibility criteria state that applicants should have a ‘good credit score’, without CCJs or a history of bankruptcy.

Some lenders offer loans to applicants with bad credit. These may have higher interest rates than other loans and come with more restrictions.

» COMPARE: Bad credit loans

Can I get a joint loan from the Post Office?

No, it is not currently possible to get a joint loan from the Post Office. However, other lenders may offer joint unsecured loans.

How to apply for a loan from the Post Office

To apply for a Post Office loan, you will need to provide:

  • your address history from the past three years
  • your UK bank account details
  • details of your current employment, including your employer and your income
  • your current outgoings

You’ll also need to meet the eligibility criteria and agree to the Post Office carrying out a hard credit check on your credit file.

After you apply and the credit check has been carried out, you will likely receive an instant decision. If accepted, you’ll be shown a personalised APR for your loan. This may differ from the representative APR, as it depends on your individual circumstances.

You can then sign your loan agreement online. Once the Post Office has received your signed agreement, you could receive the money as early as the next working day.

How long does it take to get a Post Office loan?

If you’re accepted, you could receive the funds in your bank account within two working days of the lender receiving your signed loan agreement.

Post Office Loans customer reviews

The Post Office is a credit broker. Post Office loans are provided by Bank of Ireland UK.

Bank of Ireland UK has a rating of 1.4 stars out of 5 on Trustpilot, based on 434 reviews.

On the Google Play store, the Bank of Ireland UK app scores 2.4 stars out of 5, based on over 14,700 reviews.

On the Apple App Store, the bank’s mobile app has a rating of 1.7 out of 5, based on 398 reviews.

These ratings are on Bank of Ireland UK’s overall banking service and app, not just its lending products.

This information is correct as of 23 September 2022.

Post Office Loans FAQs

Can you borrow money from the Post Office?

Yes, the Post Office offers unsecured loans of between £1,000 and £25,000. Unsecured loans can be used for expenses such as car purchases and home redecoration.

Are Post Office loans unsecured?

Yes, all Post Office loans are unsecured. This means that you do not have to put up an asset such as your house as security.

About the author

Kristina Fox
Kristina is a writer at NerdWallet. A recent graduate trading French for finance, she has experience creating content for student newspaper Cherwell and an edtech company. Read more

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