Month: September 2016

Things To Look Out For When Applying For Loans In The UK

slide1If you are a student looking to complete your tuition fees so you can start the next academic session with a completely clear conscience or you are a small business owner looking to get a small loan to buy some new products, you must have considered getting a loan sometime. While loans can be a lifesaver in many scenarios, if not properly planned out, your loan can end up being an albatross weighing on you a lot longer than you would like. This post details some of the things you should look out for before you take up a loan with any bank or credit facility in the UK.

Your location

When applying for a loan, your location determines where you would go to with your application. Students in North Ireland, for example, have no business applying at the Student Loan Company as the SLC is only for those students in England. North Ireland students are expected to apply at the Education and Library Board. This is because there are certain provisos maintained by your location that have to be followed by law and they may be different from that found in other locations. Find out from the banks or loan facilities in your location, what is necessary, before you apply for the loan.

The interest rate

While many banks or loan facilities usually post a credit or loan rate at the beginning of the year, they hardly ever adhere to the rate posted, and it might require some negotiating to get them to a figure that is favourable for you. Ensure you find out the actual rate the bank offers and if it will be necessary for you to open an account at the bank before applying for a loan there.

Your Credit file

The reason you should find out the actual rates being offered before you apply is because, every application you make is recorded on your credit file. A number of the banks which offer the lowest credit rates often turn away applicants because of the number of applications on their credit file. According to telegraph.co.uk, this amount is up to 90%. Be careful how many times you apply for credit; it can affect your chances of getting a good deal.

Your particulars

When applying for a loan in the UK, you are expected to have certain particulars readily available. Failure to provide a national insurance number, passport number and bank sort code often results in you being denied the loan. Ensure you have all your necessary particulars ready before you apply for the loan.

Parents’ or partner’s income details

When applying on the grounds of household income, ensure you have the permission of your parents or partner to share their income details. This is because those details will be required of you to complete the application form.

If you follow these details listed above, you can be assured of a high chance of getting your loan application approved by whatever body you apply to.

Guarantor Loans in the UK – How do They Work

guarantor-loans4The state of the economy is such that more and more people are being laid off every day. In such a scenario, loans have become a common means for people to meet their financial needs. However, having a bad credit score can make it extremely difficult for a person to get a loan at low interest rates. For such people, an alternative borrowing option that is becoming increasingly popular these days is guarantor loans in the UK. These are unsecured loans which can be obtained from specialist guarantor loan companies at a nominal interest rate.

What do Guarantor Loans Entail?

As its name suggests a guarantor loan requires a guarantor, a person who is capable of repaying the loan if the person taking the loan is unable to repay it himself. This guarantor will have to sign on the terms of the loan alongside the borrower. He would have to supply personal details such as some sort of identification, bank statements, address and a contact number to the lender so that he can be contacted in the event the loanee defaults. The guarantor is usually not contacted or involved during routine loan repayments. He would only be asked to step in if you fail to repay the loan or miss any of your scheduled repayments.

Who Can be the Guarantor

The guarantor can be anybody that is willing to take up this responsibility on behalf of the borrower. For instance, it can be a close friend or a family member who is confident that you will be able to repay the loan. However, it can’t be the spouse or anyone that is financially linked to you. The guarantor must be at least 21 years of age and have a good credit history as well. The company who is offering the guarantor loan is going to check the financial credentials and information provided by the guarantor before issuing the loan. Some companies even require the guarantor to be a homeowner in the UK as well.

How to Get Guarantor Loans

Getting a guarantor loan isn’t that difficult nowadays. There are a number of specialist guarantor loan companies that are willing to offer this type of loan to you. However, each one offers the loan at a different interest rate and might have varying processing times. Some companies offer guarantor loans at a low interest rate but take a lot of time to process the loan request while others take less time in processing the loan but demand higher interest rates. Therefore, it is important that you shop around and compare multiple guarantor loan companies to find out which one among them is offering the best deal to you.

Advantages of Guarantor Loans

There are a number of advantages of guarantor loans but the most obvious one is that they give you the chance to get a loan at a nominal interest rate even if you have a bad credit history. Moreover, repaying a guarantor loan within the due time limit can also help in improving your credit score as well.