Which personal loan providers allow flexible payments

26left

I want to take out an unsecured loan for £20k over 5 years. 

Some months I’d like to make over payments. 

Some months I might not have enough for the regular payment.

Which mainstream lenders supports this please?

I don’t want an underpayment to result in missed payment / admin fee, hurt my credit rating etc. 

Thanks all!

MEM62

None, as far as I am aware.  Any loan will have a minimum contractual payments that you will have to meet.  Your proposition suggests that you maybe financially stressed some months, which is a red flag to lenders. In addition, I am sure that most mainstream lenders would not want the administrative burden of re-balancing your loan each time make an over or under payment. 

The alternative is to ensure that you can meet the minimum payments and, when you have excess cash, put that aside to cover those months when you are short so you always have the cash to meet your commitments.  

FlorayG

I don't think anyone will let you underpay but I recently had a loan with Allium Money that allowed overpayments as often and as high as you like. It was a ten year loan and I was so chuffed with myself I paid it off in under two years

Hoenir

Put the spend on credit cards if you need flexibility. 

born_again

Put extra funds into a savings account to cover when you can not make the monthly amount.


If you think you might not make payments some months, then you may not get the loan you require.

CliveOfIndia

As others have pointed out, some lenders will allow you to make overpayments, but none will allow you to pay less than the contractual monthly instalment.

If you are already expecting to have difficulty honouring the payment in some months, I would suggest that taking out a loan is probably not the wisest move.

What do you want the loan for?  I only ask because there may possibly be either a cheaper alternative, or else an alternative finance option available.

ManyWays

From memory Lloyds allows loan customers to take 1 or 2 months payment breaks a year. If that is in the Terms it shouldnt hurt your credit score. If you need more flexibility than that, I am not sure a loan is the correct product for you. 

DullGreyGuy

Some lenders do allow occasional repayment holidays (where you pay nothing rather than a lesser amount) but they have to be "applied for" and there are a series of rules about not being consecutive months etc. They extend the term of your loan each time and therefore increases the interest. 

Sounds like you'd be better off not overpaying initially and building up a fund to ensure you can always meet the minimum, once thats done then consider overpaying.

CliveOfIndia

ManyWays said:

From memory Lloyds allows loan customers to take 1 or 2 months payment breaks a year. If that is in the Terms it shouldnt hurt your credit score.

Whether it hurts your score or not is irrelevant.  But it is usually recorded on your credit history, and will be taken into account by any future lenders (this was quite a common thing during Covid).

And, as noted by DullGreyGuy, taking a "payment holiday" will increase the amount of interest you pay overall.  Interest is still charged for the months where you are taking an authorised payment break.

electriccactus

26left said:

I want to take out an unsecured loan for £20k over 5 years. 

Some months I’d like to make over payments. 

Some months I might not have enough for the regular payment.

Which mainstream lenders supports this please?

I don’t want an underpayment to result in missed payment / admin fee, hurt my credit rating etc. 

Thanks all!

Flexible loans were all essentially credit cards without the card, although I think they typically offered a lower rate of interest than the now fairly typical 24%. I'm not aware of anyone still offering these.

I'd say you have two options.

1. If you can afford to make overpayments for the first 6+ months then just put this to one side in an interest-bearing account and use it to cover the shortfall in the months where you can't meet the contractual payments.
2. Take out a loan over a longer term which will lower the monthly payment, hopefully to an amount that you can afford to pay come what may. Overpay in months when you can, pay the regular payment in other months.

sourcrates

26left said:

I want to take out an unsecured loan for £20k over 5 years. 

Some months I’d like to make over payments. 

Some months I might not have enough for the regular payment.

Which mainstream lenders supports this please?

I don’t want an underpayment to result in missed payment / admin fee, hurt my credit rating etc. 

Thanks all!

Loans are generally repaid on a monthly basis, and your financial conduct whilst under contract is as you must be aware, recorded, also on a monthly basis.

That is how the credit reference agencies work, in tandem with lenders.

You will not get a loan that allows repayment ad hoc, all loans are repayable monthly, some may allow overpayments, and may also offer payment holidays, but these are usually restricted to just one or two months per agreement.

Flexible repayment, especially on a 20k loan, is not something offered by any lender I know of.