Things to know and consider for when applying for a loan

Posted bySophie Knight | Category Blog | Date 08 December 2017

If you are new to the world of loans and are thinking of applying for one, it can be daunting. Do not fret however, we have complied a list of things that you should consider when applying for a loan and what to look out for. Here are all the most important things you need to know when applying for a loan.

You may be only allowed to borrow up to £25,000 on an unsecured loan

When applying for a loan, there are two types – secured and unsecured.

An unsecured loan is is aimed at those who are wanting to borrow a relatively small amount – they tend to offer amounts from and between £1,000 and £25,000.

A secured loan is held against your property

property-protection

A secured loan is also known as a homeowner’s loan. It derives it’s name from the fact that the debt is help against your property. What this will mean is that your home is at risk and may even be repossessed if you cannot keep up with the monthly repayments.

The minimum loan size that you can get on a secured loan is normally around £10,000 and you may be able to borrow up to £100,000. The maximum loan size is dependant on the equity of your home, so it could be much lower than £10,000.

You may see an advertised rate and be offered a different one

You should definitely watch out for this one! The rates you may see advertised may be based on ‘typical rates’ – this means the lender has used a strategy known as risk-based pricing. While it is true that at least 66% of applicants must be offered this typical rate, it does not guarantee that you will be offered this, and the rate could be a lot higher.

Good Credit Ratings, Better Rates

credit-score

It is no surprise that the applicants with good credit ratings will receive the best rates. If you have bad credit ratings, you are unlikely to be rejected but will struggle to get as good of a rate.

Look for a Loans Company with a Good Reputation

Make sure to do your homework on with lender you choose. Check out Reviews.com to check up on the providers to see what others are saying about them.

You should also look them up on social media to see what kind of things they are posting about, to see how they deal with their customers and the complaints.

You should also choose a company that is on the FCA register as this means that they adhere to a certain standard and you will not be scammed or mistreated.

If you are wanting some money quickly, we recommend quick loans express.

They are FCA authorised, offering loans up to £1100. They also accept applicants with bad credit scores, as well as good credits. All loans will be deposited into you account in 1 hour!