Advice please =F1 I need a cheap loan to suit my personal
circumstances.
Planning a big wedding, fancy a new car, want a new kitchen =F1
or perhaps just to consolidate some existing debts, but don%rsquo;t
want to pay through the nose? In other words you%rsquo;re looking for
the cheapest possible deal on a loan.
It is a minefield out there =F1 as there are numerous offers
popping out at you every way you look. But everyone%rsquo;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:
=EF Offering a free service
=EF Having access to numerous financial products from numerous
lenders
=EF Finding a specific product to suit your personal
circumstances
=EF Keeping up to date with the latest products on the market
=EF Acting as a go-between with you and your lender
=EF Underwriting the loan from a suitable lender
=EF Quoting and agreeing terms that you understand
=EF Providing you with all the relevant paperwork from your
lender
=EF Advising you on anything you don%rsquo;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%rsquo;t assume that just because a
colleague, friend, neighbour =F1 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:
=EF Your monthly income
=EF Your partner%rsquo;s income (if applicable)
=EF Your household costs, including bills
=EF Any existing loans
=EF Other outgoings, such as pension contributions, maintenance
payments
=EF The equity in your house (ie how much of the mortgage you
have already paid off and the value the house has risen by)
=EF 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 =F1 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 =A32 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.
About The Author: Chris Hake provides advice on finding cheap
loans. Visit his website here http://www.cheap-rate-loans.co.uk
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