Where to Start When You Need a Loan
Getting a loan especially during a credit crunch can take serious effort and being prepared beforehand can make all the difference when it comes to getting approval or being denied. The first thing you need to do is to make sure that you are asking for the lowest possible amount you need. Credit crunches mean lenders have less money to loan by applying for the absolute minimum you need you are going to increase the likelihood of being accepted. Next check to make sure there is nothing in your credit files that are going to make a lender look at your twice. The better your credit files are the greater your chance at being approved.
Use a Credit Estimating Loan Comparison Service
Look around for loans you know you are going to qualify for. This means knowing information about your credit. Consider using sites like MoneySupermarket.com This site has a search facility as well as a facility that allows you to estimate your credit score by answering just a few quick questions. This will give you the opportunity to know where to look before you begin applying. While the facility does not offer all the lenders available there is a broad selection.
For those with less than perfect credit, this search can actually help to point you in the direction of lenders who may be willing to work with you, that you may not have considered previously. It is important to check the loan product being suggested as the site does include secured loans. Secured loans should be used only as a last resort because of the increased risk.
What about your own Bank?
Many people do not realise that they can actually stand a chance with their bank when they are looking into loans and if you have a good history with them it can go a long way to getting accepted. Check their rates and how they compare however before selecting them. Just because they are the bank you do business with does not mean they are the best deal in town.
Ask for a preliminjary chat with your bank to assess the likelihood of getting a loan. Doing this can avoid an unsuccessful application that incurs a check on your credit record. Maybe even bring a copy of your credit report with you.
Consider a Credit Union Loan
Consider looking into a credit union. Many people overlook these because they are usually attached to government workers or particular industries but they are usually co-operative and there are approximately 500 of them currently in the UK. You may be surprised at what it takes to qualify with them. There are also a number of other benefits to Credit unions, such as no hidden fees, no penalties for early repayment and life insurance is usually included with the loan. They may have higher interest rates however, ranging from 13-27% and the terms are usually up to 5 years on unsecured loans and up to 10 years on secured loans.
Because of the current economic situations and the credit crunch consider other options if you are having difficulty obtaining a loan unless it is absolutely essential. If you have less than perfect credit consider doing damage control or attempting to repair your files if possible before attempting the loan again it may be worth while to take the extra time to ensure that you have a greater chance of approval.
