Guest Post by Jodie McDonnell
Many people across the United Kingdom fall victim to financial strife, often due to factors that are out of their control. A loan—when taken out for the right reasons—can help individuals who are in need of money for obtaining a mortgage, car loan, or other loan among other things.
Even more important is getting the right loan, a loan that will solve your problem and not make your financial situation worse. In order to do that, you need to approach borrowing with the proper attitude and a few tools that will help you to get the best deal to work within your circumstances.
Many times the reason people get into credit difficulty happens at the very time a loan is taken. The person could have been borrowing more than he could afford to repay, or doing so with stiff repayment terms he could never meet. You’ll only have one opportunity to prevent that from happening, and that’s when you are applying for the loan. It is therefore critical that you get this right at the very beginning when it counts most, and that means getting the very best loan you can.
Finding the best range of loan options
Loans vary depending on the creditor and type of loan; the best one for you will depend on your unique situation. With some simple tools, you can find a suitable loan that is tailored to your needs. It’s often best to start by investigating websites which offer the services of competing lenders, that way you’ll have a way of comparing the loan offerings of several lenders at the same time. Loan programs are all about numbers, which is where confusion begins to enter the picture. Any way that you can simplify loan comparisons will be a step in the right direction.
Try to search loans at Money Expert, a site that offers a comprehensive search of both personal and home loans from lenders across the UK. Your lender will award a specific loan amount to you with a set repayment period.
When signing a loan agreement, you are bound by the terms and conditions of the creditor and this is incredibly important. These conditions will include the obligation you are under to pay back the original loan amount plus interest; while the interest rate on the loan will vary from creditor to creditor. Given the current state of the UK economy, it has never been more important to research your options with different lenders. It’s absolutely critical that you obtain the loan that will not only meet your financial needs, but will also fit within your budget.
It’s not your imagination—it IS harder to get a loan now than ever
It is now more difficult to find a good deal on a loan, therefore it is important that you check to be sure you are getting the best interest rate for you. It is also important to remember that before you sign up for anything, you must check what the product is offering exactly and what you are about to legally bind yourself to.
Watch out for any hidden charges, penalties or terms in the small print. Also, personal loans come in a variety of forms including unsecured or secured lending—make sure you are certain of which you are taking and exactly what collateral you’re pledging for the loan.
The loan offer will depend on a number of factors including whether the borrower has a good or bad credit history or no credit history at all. For example, for a person with a good credit rating an unsecured loan may offer lower monthly repayments compared to a person with weaker credit history. In contrast, a person with bad credit history may need to put up property as security to be granted credit; this method is usually applied when the individual is in need of a larger loan or lower rate of interest.
Despite it usually costing more in interest repayments, many homeowners choose to take an unsecured personal loan so as not to risk their property should they experience financial difficulty and are unable to repay the loan in the future.
When borrowing money responsibly, you can develop a strong credit history that is useful should you need to borrow more money further down the line. For example, obtaining a mortgage, car loan, or other loan, is easier when you have a good credit history – you will also enjoy lower interest rates as a result.
What ever type of loan you choose, be absolutely certain that it is one that will improve your financial condition, especially in the future, and not act merely as a means of getting past a difficult moment. A loan should always be a financial instrument that moves you forward, and not one that puts you in a deeper hole than the one you’re trying to dig out of.
Debt Is Different For the Self-Employed
Surviving Debt Collection Calls
How Much Student Loan Debt is Too Much?
Is Now a Good Time to Refinance?
How Can a Credit Card Save You Money?
Why Paying Down Your Mortgage Is More Important Than Ever