Want A Loan But Worried About Customer Service

Want a​ Loan But Worried About Customer Service?
Worried that taking out a​ loan is​ more hassle than it’s worth? Just because you’re asking for something from an​ organisation,​ doesn’t mean you​ shouldn’t get good customer service .​
After all,​ there are thousands of​ organisations out there all willing to​ lend you​ money.
As most of​ us know,​ the​ reason for taking out a​ loan is​ to​ pay for something that you​ can’t afford at​ that particular time .​
The way a​ loan works is​ that you​ pay an​ agreed monthly amount back to​ the​ lender for a​ set period,​ until the​ loan is​ paid off in​ full.
Despite what some people may think,​ there is​ such a​ thing as​ a​ 'no hassle' loan .​
Our practical advice will help you​ avoid some of​ the​ common pitfalls and make you​ realise just how easy the​ process of​ applying for a​ loan should be:
What types of​ loan are available?
The two types are secured and unsecured .​
Secured is​ where you​ borrow on​ the​ value of​ your house .​
These loans tend to​ be more cost-effective,​ as​ the​ rates are normally lower than unsecured,​ because there's less risk to​ the​ lender.
How do I​ ensure value for money?
• Firstly decide how much you’d like to​ borrow and ideally over what time period you’d like to​ pay it​ back .​
That way you​ can shop around for the​ best loan quotes.
• Always read the​ small print .​
Some loans incur charges,​ such as​ set up fees or​ imply you​ should take out their insurance,​ which can be expensive.
• Taking out a​ secured loan (rather than unsecured) will usually offer much better rates of​ interest,​ as​ the​ risk is​ not as​ great for the​ lender.
Do I​ have to​ take out insurance?
No – you​ don’t .​
However,​ many lenders may suggest it​ to​ you,​ as​ it​ offers protection in​ certain circumstances (such as​ illness) if​ you​ couldn’t cover your re-payments .​
Also,​ you​ don’t have to​ use the​ insurance offered by your lender,​ as​ you​ may find a​ cheaper option elsewhere.
If you​ do decide to​ take out insurance,​ remember that it​ will increase your monthly payments,​ so you’ll need to​ factor that in​ to​ your budget.
What is​ an​ APR?
• APR represents the​ interest you​ will pay on​ your loan .​
It is​ the​ Annual Percentage Rate of​ charge.
• APRs vary dramatically from lender to​ lender and the​ one you​ will be offered could be higher than any advertised,​ depending on​ your personal circumstances.
• Clearly the​ lower the​ APR,​ the​ less interest you​ will pay on​ your loan .​
However,​ be aware that some lenders advertise a​ monthly APR on​ their loan quotes,​ which when calculated on​ a​ yearly basis becomes a​ lot more expensive.
• Before you​ sign a​ loan agreement,​ your lender is​ obliged to​ tell you​ what APR you​ will be paying.
What are the​ pitfalls when applying for a​ loan?
• Always make sure you​ understand your loan agreement,​ as​ once you​ have signed it,​ you​ are legally bound by its terms.
• When looking for interest rates (or APRs) find out if​ the​ loan will be on​ a​ fixed or​ variable rate .​
Fixed means the​ amount you​ pay will remain the​ same for the​ length of​ the​ loan,​ but variable means that it​ could change – which means it’s more likely to​ go up – and this could affect your budgeting.
• Find out abut other conditions attached to​ the​ loan and be sure that they suit your requirements .​
For example,​ you​ may be able to​ take a​ break from paying for a​ month or​ so,​ or​ you​ may want to​ pay off the​ loan early .​
Check that you​ do not have pay a​ penalty for such options.
Do I​ have any legal protection when taking out a​ loan?
Yes – to​ a​ certain extent,​ as​ all personal loans are protected by the​ Consumer Credit Act 1974 .​
However,​ as​ already stated,​ once you​ have signed a​ loan agreement,​ you​ are expected to​ fulfil your agreement.
The Act contains regulates how money is​ lent and cover you​ for an​ unsecured loan up to​ £25,​000 .​
If you​ use a​ reputable broker it​ is​ highly unlikely that you​ will need to​ complain about your lender.
Never bury your head in​ the​ sand if​ you​ get into difficulty .​
Reputable lenders practice good customer service,​ but remember the​ onus is​ on​ you​ to​ keep to​ your loan agreement .​
If you​ ever find yourself not able to​ meet the​ repayments,​ contact your lender immediately .​
They should be able to​ help you,​ by re-visiting your repayments .​
However,​ there may be a​ charge for this.
Who should I​ borrow from?
With so much choice on​ the​ market these days,​ it’s always advisable to​ use a​ broker,​ who can shop around to​ find the​ most competitive tailor-made deal for you.

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