Learn about loans

LOANS – WHAT YOU NEED TO KNOW

 Loans – they can help you to pay for big ticket items like say a new kitchen or house repairs like a new boiler or roof that needs fixing before winter. Sometimes it’s a way to consolidate debt and make it more manageable if you have too much on credit cards. It can save you money by paying less each month as you can  spread the cost over a few years. On occasion you may need cash for an unexpected event and have to borrow money as a loan and there are many ways to do this. 

What type of loan is best for me?  – this depends on what you need it for and if your need to borrow for a short period or a longer period of time.

• Should I use a bank overdraft? Only use a bank overdraft is it an agreed one – check with your bank as it can be arranged and will be low or no interest if you use it. This is usually best if you have pressure on your finances that month and next month you should be ok. If it’s likely to be an on-going gap you will need to get a loan to make it easier to manage your money
• Are payday loans best avoided?  We know there will be times you just need money fast to keep you going or bridge a gap. We’re not a fan as they charge such high interest rates so should be a last option or a one off. We don’t recommend any of them and would say try family to help you first. If you need more advice or support look at moneyhelper.co.uk

• What about long-term loans? This is the best solution to borrow to cover big one-off costs or consolidate higher interest debts into one more manageable monthly payment. Make sure you can afford the monthly payments before taking out any loan. Compare rates as small differences can mean big money with repayments being over 3-5 years. We recommend comparing on a price comparison website like comparethemarket.com/loans to get the best rates today. 

• Do fees apply? Often when you borrow or take out a loan what they call a “product fee” applies so lookout for it as some can be expensive (e.g. £995). They say you can add it to the loan, we say if you can don’t and pay it or look for a no or lower fee loan in the market. 

• Top tips when borrowing? Shop around – compares rates as they vary a lot and a lower rate means you pay less each month and over the term of the loan. Check your score – if your credit score is good then you will be accepted so have many offers to compare before committing to anyone. Try to avoid fees – find loans without product fees. Avoid payday loans – they charge very high rates and make no sense. 

Brokers may increase acceptance

Many people use a broker to get a loan as they may help you to get accepted. They know the loan space, how to fill in the forms correctly, which lenders to approach knowing you will be eligible. and to find the loan that’s right for you.

Brokers on comparison sites

Sometimes when you look at a loan on a comparison site you will be directed to one of the big brokers who deals with your loan enquiry. When you see loan providers the link whatever the brand mostly goes to a broker.

Loans.co.uk is one of those brokers who can help you to find the best deals on loans that you will be eligible for with a range of lenders.

Benefits of brokers?

Broker may help you to find a loan that’s right for you. They will take your details and what you’re looking for then identify loans you are eligible for and present the best options back to you.

They take all the hassle and worry out of looking for a loan. They manage the whole process for you including filling in application forms. You only provide the information compared with multiple applications on multiple sites.

Then when they come back to you with options you know you can get the loan and exactly what you will pay in repayments. Many people value this expert advice in the loan space making it much easier to borrow knowing you have an expert in your corner.

This information is intended for editorial purposes only and not  intended as a recommendation or financial advice