Personal Loans How To Make Sure You Get The Best Deal

Personal Loans How to​ Make Sure you​ Get the​ Best Deal
If you​ are in​ need of​ obtaining additional money quickly,​ then your main choices are using a​ credit card or​ obtaining a​ personal loan from a​ bank,​ building society or​ from a​ specialist loan company. For short term borrowing credit cards can be useful,​ but for longer term borrowing a​ loan may seem to​ be the​ best option. Whenever you​ take out a​ loan or​ credit agreement,​ your prospective lender will assess your personal circumstances and decide whether to​ offer to​ lend you​ the​ funds you​ require subject to​ its repayment with added interest being paid.
Depending on​ the​ result of​ a​ financial health check completed by the​ lender,​ you​ may be offered,​ on​ average,​ up to​ £15,​000 to​ be paid back over a​ period of​ between 6 months to​ 10 years. the​ actual amount that you​ can borrow and the​ interest rate charged will depend on​ factors such as​ your past credit record,​ amount requested,​ duration of​ loan,​ purpose of​ the​ loan,​ whether the​ amount borrowed is​ secured or​ unsecured,​ and acceptance of​ various terms and conditions applied by the​ lender.
What is​ the​ difference between a​ secured and an unsecured loan?
An unsecured loan is​ where the​ loan repayments are not tied to​ any additional guarantee except the​ loan agreement. Should you​ default on​ payments you​ could damage your credit rating or​ become blacklisted which may lead to​ future difficulties in​ taking out a​ new credit card,​ a​ mortgage,​ additional loans,​ or​ obtaining interestfree deals in​ shops.

A secured loan is​ one where you​ provide collateral which will guarantee the​ repayment of​ the​ loan should you​ find yourself in​ unexpected difficulties. This type of​ loan is​ usually secured against your house,​ which means that if​ you​ cannot meet the​ loan repayment schedule,​ you​ may be required to​ sell your house in​ order to​ pay back the​ money borrowed. Secured loans are generally seen as​ less of​ a​ risk by lenders,​ as​ they are likely more to​ recover their money if​ things go wrong. This means that the​ amount that can be borrowed is​ usually higher,​ and the​ rates offered are often much better than would be obtained on​ an unsecured loan.
An important point to​ note is​ that rates can vary considerably. on​ a​ £5000 unsecured loan repaid over two years without any adverse credit history,​ financial comparison site Moneynet http//www. moneynet. co. uk/loans/index. shtml provided results varying from an annual percentage rate APR of​ 5. 5% to​ 15. 9% which would make a​ difference of​ £525. 36 over the​ life of​ the​ loan. Don’t just take the​ first loan you​ see.
Another factor to​ bear in​ mind when looking for any financial product is​ to​ ensure you​ are comparing likewithlike. Different lenders calculate the​ annual percentage rate APR in​ different ways. Dont simply look at​ the​ monthly interest rates these are frequently lower than the​ annual rate and can make you​ think you​ have got a​ much better deal than you​ have in​ reality.
Remember to​ check all the​ details and small print of​ a​ loan before taking out any type of​ financial agreement to​ ensure you​ understand what is​ required of​ you​ and that the​ loan meets your requirements. Bear in​ mind that in​ general,​ the​ shorter the​ repayment period of​ a​ loan,​ the​ less interest that you​ will be required to​ pay. However according to​ IntelligentFinance http//www. if. com/loan/loan_home. asp ,​ over a​ third of​ the​ UK adult population are unaware that 75% of​ personal loan providers levy penalties on​ borrowers who want to​ repay their debt early. This could prove to​ be an expensive surprise and if​ estimates that it​ is​ currently costing consumers about £336m a​ year.
Should you​ get rejected for a​ loan at​ a​ bank or​ building society,​ it​ is​ useful to​ know that they are obliged to​ explain the​ reasons for doing so. Any time that you​ are rejected you​ should also run a​ check on​ your credit history to​ make sure no mistakes have been made,​ and you​ can request that a​ notification of​ correction is​ made to​ prevent the​ same thing occurring in​ the​ future.
The most important things to​ do when looking for a​ loan are to
* decide on​ your loan requirements
* compare as​ many of​ the​ products being offered as​ possible
* read the​ small print
* choose whether you​ are happy with the​ terms being offered
* ensure you​ can meet the​ repayments
* only make one application at​ a​ time.
Useful resources
BBC credit scoring links http//news. bbc. co. uk/1/hi/programmes/moneybox/4315456. stm
Moneynet loan comparisons http//www. moneynet. co. uk/loans/index. shtml
Disclaimer
All information contained in​ this article,​ is​ for general information purposes only and should not be construed as​ advice under the​ Financial Services Act 1986.
You are strongly advised to​ take appropriate professional and legal advice before entering into any binding contracts.
Personal Loans How To Make Sure You Get The Best Deal Personal Loans How To Make Sure You Get The Best Deal Reviewed by Henda Yesti on August 11, 2018 Rating: 5

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