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What Makes The Best loan rates?
If you are looking to take out a loan today, you’re in for a nice treat. The price war that’s happening between loan providers means that it is now easier for you to get the best loan rates available. Add in the fact that loans rates are now available online from various reputable introducers like us here at pickaloan.co.uk, getting that quick funding to address urgent finances is now easier and more convenient.
So you can enjoy the best rates, here are some of the things that you might want to bear in mind;
Choosing the right loan
While it is now easier for you to take out the best loan rates from different sources both online and offline, even the lowest interest rate loans can have hidden costs. Before you apply for a loan, it is important that you decide two things and they are:
1.) How much You Want to Borrow
The most important thing to bear in mind when taking out event the best loan deals is to only apply for an amount that you can realistically afford. Better yet, borrow as little as possible, so you can pay it out as fast as possible. So when you take out a loan, be sure that it is something that you can comfortably afford and budget so you can stick to your payment responsibilities without complications.
2.) How Long You Wish to Borrow
The period in which you can borrow a loan will usually depend on the type of the loan and your eligibility. Personal loans, for instance, allow you to obtain large amounts of loans that you will have to pay back in a year or more. Payday loans meanwhile offer lesser amounts, for a duration of about a month. And if you possess good credit standing, you can enjoy longer repayment periods. When it comes to the best loan rate, remember that borrowing over longer periods can be more costly than shorter ones. With that being said, opt for the loan term that is the shortest possible.
The Best Loan Rates from Loans
Now that you know it is important to borrow amounts that you can comfortably afford for the shortest period possible, let us now look at the options that are available. Normally, the best loan rates are:
- Personal Loans – Unsecured forms of loans that allow you to borrow money upfront and pay it back in an agreed period through fix monthly payments. Because it is unsecured, there is no collateral involved and your application will be determined by your personal circumstances such as your income and your monthly outgoings. From a personal loan lender like (website name), you can borrow as much as £25,500 for flexible terms.
- Unsecured Loans – The loans are secured against your home, car, or property which means that there is risk involved. This is because when you can’t keep up with your repayments, the lender has the legal right to take possession of your property to cover their losses.
Best Personal Loan Rates
If you are not comfortable in putting up your home or any property as collateral to take out a loan, then personal loans are the ideal route for you. If you want to enjoy the best personal loan rates available, you must first meet certain requirements which include:
- Possess an income required by the lender, e.g. £12,000 per year
- Must be employed and enjoy a stable income
- Having a strong credit record
Most of the time, those who possess excellent credit standing are the ones who enjoy the best personal loan rates. Credit history is important because it reflects how responsible you are in managing your debts. The better your history, the more trustworthy you are to lenders in sticking to your payment commitments and the more likely they will grant you with personal loans with minimal interest. Also, if you have a high income and have little to no debt, you can also experience the best loan deals for unsecured personal loans from online lenders like (website name).
Best Loan Rates if You Have Bad Credit
A credit score is crucial to obtain the best personal loan rates from lenders but if you have bad credit and you want to enjoy the best loan rate possible, having someone to co-sign your loan will help you greatly. You need to find someone who will act as a guarantor on behalf of your loan so lenders can evaluate your deal as less risky. This is because when you default on your payments, your guarantor will be the one to step in and bear the repayment duties. This gives lenders that much needed peace of mind in granting you the best loan rates available.
Sourcing out a guarantor, however, is not easy and the person needs to meet certain eligibility requirements to become accepted from guarantor loan lenders like (website name). These requirements include:
- Must be a UK resident (homeowner or non-homeowner)
- At least 21 years but not over 75 years at the onset of the loan
- Possess a strong credit history or at worst a slightly imperfect credit history
- Hold a UK bank account debit card
- Prove an income as required by the lender (employed, self-employed or retired)
- Be financially independent of the borrower
If you can find a guarantor that meets such requirements, you can enjoy a guarantor loan with the best loan rates for up to £15,000 with flexible payment terms.
It Could be Cheaper to Borrow More
It’s also important to note that the best loan rates are typically those from large amounts. If you want to borrow £4,900 over five years, for instance, the best loan rate could fall to 5.2%, which gives you a total repayment of £5,575 (£675 interest). When you borrow £5,000 and the rate drops to 3.2%, however, this gives you a total repayment of £5,417 (£417 interest), which is £258 less. The best way to get the best loan rates, therefore, is to borrow at least £5,000 from reputable lenders that can be found by qualified introducers like Pickaloan.
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