Getting a loan
It’s true that loans are more difficult to come by than they were only a year-to-18-months ago. Fears of losses from years of relatively relaxed lending have caused banks and other financial institutions tightened their lending criteria in order to protect themselves.
That said, it’s still very much possible to get a loan. Lenders still want to be competitive in the loans market in order to make money, and with the potential for further base rate cuts on the horizon, we may soon see interest rates on personal loans come down.
Whether or not loans become cheaper or easier to obtain, it always pays to make sure you are well prepared. By taking a few simple steps, you can improve your chances of getting a loan.
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Improving your chances of getting a loan
Plan your loan
Before you apply for your loan, plan how much you want to borrow, and/or how much you want to pay each month.
Because of the way APR is calculated, it can be difficult to work out how much your monthly payments will be. However, there are a number of ‘loan calculators’ online that will help you to do this.
Once you have established how much your monthly payments will be, be sure that you will be able to pay them for the duration of the loan.
Above all, don’t be tempted to borrow more than you need – the more you borrow, the higher the chance that you will find yourself unable to meet payments at some point.
Check your credit history
One of the most important things to consider when getting a loan is making sure your credit history is as good as it can be. Every time you take part in some kind of credit activity – whether it’s using a credit card, paying bills or applying for a loan – it is likely to be recorded on your credit history.
However, errors can occur – for example, old accounts not listed as settled, or missed payments entered by error – which can jeopardise your chances of getting a loan with a lower interest rate.
For that reason, it’s wise to check your credit history before applying for a loan. At least three major credit agencies (Equifax, CallCredit and Experian) offer online credit check facilities. If you do find any errors, you are entitled to call the creditors involved and ask for the entries to be amended.
Get advice from an expert loans adviser
With so many different lenders in the market, searching for the best loan deals can be difficult.
By speaking to a loans adviser, you can cut out the long hours spent searching altogether. Your loans adviser will search their panel of lenders for the best deal for your circumstances – leaving you to get on with your day.
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