Times are hard; there’s no real way of sugarcoating things as they stand right now. Regardless of your political affiliation or who you assign blame to, things are how they are, and complaining won’t help you pay your bills or get you the things you want in life. Therefore, the most common option that most folks turn to are lenders who are able and willing to loan you some ready cash regardless of your societal situation. Nonetheless, with a plethora of options now available at your fingertips, finding those who fit your specific circumstances is more challenging than it might appear at first glance. Throughout this post, you will gain a deeper understanding of what you must do if you are to land upon a lender who can provide you with what you’re after and at a rate that is conducive to what you can afford to repay.
Know Your Credit Score Beforehand
While most UK-based lenders have various options for people of all financial situations, knowing your credit score in advance will go a long way in helping you settle on a service most advantageous to your scenario. Even if you use services like Lendvia that specialize in matching you with compatible lenders, having an idea will set you in good stead. But then the question arises of how one actually goes about finding this information out. In the UK, you have three primary credit reference agencies (CRAs), including:
- Experian
- Equifax
- TransUnion
All three offer both paid and free plans while also giving you the chance to sign up for a free period where you receive most of their services for a set time (usually 30 days). However, in almost all situations, the free option is adequate and will allow you to see where you stand financially. Bear in mind that the lower your score, the higher the interest you will be charged by the leading money lenders, purely because, on paper, you appear as a higher risk. If you aren’t desperate for the money, you can always follow a few tips to slowly boost your score and, therefore, lower the amount you will have to repay on your loan. The following advice is helpful in the UK:
- Check for any errors in your report that may influence the score
- Ensure you pay off any and all credit card balances promptly
- Pay any outstanding bills (if possible)
- Avoid taking out new loans to pay off old ones
Compare Interest Rates And Fees
As with anything you do on or offline, you should always spend some time comparing the different services. When it comes to loans, this includes customer service, interest rates, and overall fees. By becoming more intimate with this information, you will be far better positioned to make more informed choices that benefit you in the long term.
Understand Your Rights As A Borrower
Fortunately, the UK has a high level of protection for those seeking money, and understanding your rights will go a long way in ensuring you aren’t taken advantage of by predatory lenders. The most valuable things to know include:
- You can cancel within 14 days: The UK has a 14-day “cooling off period” in which you are able to change your mind and cancel the loan if you have second thoughts. Moreover, this shouldn’t result in any charges as long as you cancel within 14 days.
- The right to settle early: If you find yourself able to pay off a loan early to avoid further interest fees, the law says you are well within your rights to do so. You may get charged a nominal “admin fee,” but it shouldn’t equate to the remaining interest.
- The right to complain: If you have an issue with a lender, you can make a complaint and escalate it to the Financial Ombudsman Service for review if needed.
Understand The Loan Terms Thoroughly Before Committing
Although the previous section relates to your rights as a borrower, it’s vital you walk into the contract with your eyes wide open. Even though you are afforded a range of legal protections, these tend not to cover violations of the agreement you willingly sign with the lender. Fortunately, most issues can be avoided by simply taking enough time to read and absorb the various terms and conditions imbued on you when you sign on the dotted line.
Consider The Lender’s Customer Service
This might seem like an obvious thing to consider (particularly if you are in dire straights and need money fast), but you really must check out their customer service and ensure it is up to snuff. There is nothing worse than taking out a loan and needing help, only to discover too later that the lender has a poorly staffed or non-existent helpline when you need it.
Choosing a loan provider can appear to be a challenging task when you first approach it. However, by understanding how your credit score influences the loan, along with your rights enshrined in law, you can avoid mistakes and make sure you get the right amount of money and are able to repay it without pushing yourself further into the red.