1. There is far more choice than you would imagine
Lenders want their customers to believe that they will not get a better deal anywhere else. Through a combination of skilled advertising and a lack of knowledge from many customers, it is surprising just how often people believe this without taking the time to look around.
Even if you feel as though past financial mistakes may be held against you, there are more options available to borrowers than ever before.
With options ranging from guaranteed lending to the infamous payday lending, there truly is something for everyone.
2. You don’t have to do the hard work
Sites such as this one remove all of the hard work that used to be associated with getting a loan. Whereas in the past you had to visit each lender individually, it is now possible to submit a single application to a number of lenders.
The quotes that you receive are no obligation and ensure that it couldn’t be easier to easily identify the best possible deal currently available to you.
3. Your Rating is Key
Submitting your application without first checking your credit rating is a huge mistake which may result in your rating taking a further hit.
Many lenders check the rating of a borrower during the application process to decide how much of a repayment risk they believe that they pose. This means that essentially, the worse your rating is, the smaller the chance of having your application granted.
Without knowing the state of your score, you could place your focus on a particular type of loan when cheaper options may be available.
4. Not everyone is eligible for the ‘Representative APR’!
If you check closely, you will notice that many of the available options are quoted with a ‘representative APR’ and it is a little known fact that not all applicants will be eligible for this interest rate.
The BSI (British Standards Institute) reports that:
“The Representative APR must reflect at least 51% of business expected to result from the advertisement. The standard information must be representative of agreements to which the Representative APR applies.”
The rate of interest you’ll pay on some forms of borrowing – such as a fast loan – are decided by a number of factors including your credit rating and status.
To ensure that customers have the ability to compare these loans prior to submitting an application (unfortunately, there is no way of knowing the rate you will be offered until your application has been accepted), lenders are now required to display a “Representative APR” in advertising.
This means that despite the fact you see a particular APR quoted on an advert or a website, you may find the quote you receive is far more expensive than you originally thought.
5. Are early repayments options available?
With many loans, you may have the opportunity to make additional payments to help pay off the outstanding balance and as a result reduce the overall cost.
The Money Advice Service article – How to reduce the cost of your personal loans states that:
“With unsecured loans taken out after 1 February 2011, you can make extra payments of up to £8,000 in a 12-month period without penalty in almost all situations. For extra payments of over £8,000 the maximum penalty is 1% of the extra amount paid above the limit. For example, if you paid back £9,000 – £1,000 over the limit – the most you could be charged would be £10.”
Do you know what your credit file looks like?
Staying on top of your credit rating is absolutely crucial if you wish to become eligible for the cheapest loans on the market.
Despite there being a number of CRAs in the UK from which you can obtain your report, they are all likely to come back to you with slightly different information.
For this reason, we recommend visiting Checkmyfile to access the UK’s only multi-agency report to ensure that you obtain all of the relevant information.
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