Short Cuts To Finding The Cheapest Loan

Short Cuts To Finding The Cheapest Loan



Short Cuts to​ Finding the​ Cheapest Loan
Advice please – I​ need a​ cheap loan to​ suit my personal circumstances.
Planning a​ big wedding,​ fancy a​ new car,​ want a​ new kitchen – or​ perhaps just to​ consolidate some existing debts,​ but don’t want to​ pay through the​ nose? in​ other words you’re looking for the​ cheapest possible deal on​ a​ loan.
It is​ a​ minefield out there – as​ there are numerous offers popping out at​ you​ every way you​ look .​
But everyone’s circumstances are different,​ so an​ excellent way to​ decide on​ the​ best loan for you​ is​ to​ go to​ a​ loan broker.
The advantages of​ using a​ loan broker are that they aim to​ get you​ the​ best deal by:
• Offering a​ free service
• Having access to​ numerous financial products from numerous lenders
• Finding a​ specific product to​ suit your personal circumstances
• Keeping up to​ date with the​ latest products on​ the​ market
• Acting as​ a​ go-between with you​ and your lender
• Underwriting the​ loan from a​ suitable lender
• Quoting and agreeing terms that you​ understand
• Providing you​ with all the​ relevant paperwork from your lender
• Advising you​ on​ anything you​ don’t understand
The broker understands that everyone who wants to​ borrow has a​ different set of​ circumstances .​
Because of​ this the​ rate you​ may be offered can differ dramatically and depends on:
1 .​
Your personal circumstances
The amount a​ lender decides to​ offer you​ always depends on​ your personal circumstances .​
Don’t assume that just because a​ colleague,​ friend,​ neighbour – or​ even your spouse,​ has been lent a​ lump sum at​ a​ certain interest rate,​ that you​ will be offered the​ same.
Personal circumstances include:
• Your monthly income
• Your partner’s income (if applicable)
• Your household costs,​ including bills
• Any existing loans
• Other outgoings,​ such as​ pension contributions,​ maintenance payments
• the​ equity in​ your house (ie how much of​ the​ mortgage you​ have already paid off and the​ value the​ house has risen by)
• What you​ will be using the​ loan for .​
For example,​ a​ loan for home improvements could be seen as​ increasing the​ value of​ your home,​ so is​ an​ investment,​ whereas borrowing money for a​ holiday is​ not.
2 .​
Your credit score
When applying for a​ loan you​ will have to​ answer questions,​ so that your lender can decide how reliable you​ are as​ a​ borrower .​
The questions include how much you​ want to​ borrow and for how long,​ what your income is​ etc.
Your answers will then be given a​ points score .​
If you​ have a​ high rating you​ are more likely to​ be offered the​ amount of​ money you​ need with a​ competitive interest rate .​
If your score is​ lower you​ may be offered less money,​ or​ perhaps a​ higher interest rate .​
Do note that all loan providers use this information differently – some will be more interested in​ your income and others in​ what you​ want to​ spend the​ money on.
3 .​
Your credit rating
As well as​ being credit scored,​ your lender will look at​ your credit history by contacting a​ credit reference agency .​
Everyone in​ the​ UK has what is​ known as​ a​ credit rating .​
This is​ information kept on​ you​ by all financial institutions,​ such as​ banks,​ building societies,​ mortgage lenders,​ credit card companies and utilities companies,​ including telephone,​ gas and electricity suppliers .​
It gives your full credit history,​ so your lender will know if​ you​ have ever defaulted (not paid back the​ agreed amount) on​ a​ loan before.
Know your credit rating .​
There are three credit rating agencies in​ the​ UK,​ who hold information on​ you​ .​
Sometimes information logged can be incorrect,​ as​ you​ can be affected by the​ credit rating of​ someone who has previously lived at​ your address .​
To be sure that your details are correct send any one of​ the​ three companies a​ cheque for £2 and they should send you​ your information within seven days .​
They are:
1) Call credit plc - www.callcredit.co.uk
2) Equifax plc - www.econsumer.equifax.co.uk
3) Experian plc - www.uk.experian.com
If you​ do have any queries once you​ have received the​ information contact one of​ the​ agencies above,​ or​ ask your broker for advice.




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