Where is the best way to apply for a loan in the UK?

Where is the best way to apply for a loan in the UK?

It often happens that we need money and our account is empty. Unplanned expenses like to appear at the least appropriate times. Where is the best to apply for a loan in the UK?

The UK loan market is very complicated. They are divided into many types, and each lender has a different offer. It’s easy to get lost in it all. It all depends on how much we need and for how long. And of course what creditworthiness we have. Where is the best to apply for a loan in the UK? Well, you can take it both in the bank and in a non-bank company that deals with it. A good example is the UK Loans page, where everyone can find something for themselves.

Overdraft or credit card

Overdraft or credit card

The simplest and least expensive solution is to make a free overdraft on your account. In other words, the account limit, i.e. the amount at which we can make a minus. Then even without funds, we can without any formalities, just spend more than we have, exceed our balance. An additional plus is the fact that we usually pay absolutely nothing for a period of time, e.g. a month. This is a very convenient solution. The amount of overdraft depends on how much time we are customers of the bank and how much creditworthiness we have and, of course, our earnings. It is also important to remember not to exceed the loan limit granted, even by one pound. It threatens with really big and disproportionate penalties. It is also worth finding out what fees are charged in the event of failure to pay the debit on time.

If you want to borrow more and your creditworthiness is sufficient, think about a 0% on purchases credit card. There is a bit more trouble with her, but she works in a very similar way to the limit. With the fact that you can spend much more, and the repayment period without any interest is much longer. If you have worse creditworthiness, try to apply for a poor credit card. Usually it has worse conditions, but allows you to build your history and choose better offers over time. However, remember to read carefully all conditions. The card may not have interest, but fees for using it are possible. In addition, it may also have restrictions. For example, buying only in specific places. The basic thing is not to use it to choose cash at an ATM, it may accrue interest or other charges.

Traditional cash loan

Traditional cash loan

Of course, you can also take a traditional loan from a bank or broker, e.g. on our UK Loans page. Loans are less profitable for smaller amounts compared to an overdraft or credit card. It’s much better when you need to borrow more. It is worth finding out what the conditions at your bank are, maybe it has a special offer for us. Otherwise, you should trust the broker. Loan brokers have access to all the best offers currently on the market, so you can easily choose something for yourself. Brokers also have offers for people with low credit scores or those who already have a loan on their account. By applying for a loan from a broker, you guarantee yourself access to a wide range of loan offers.

When choosing a loan offer, always look at the so-called APR, i.e. comprehensive, annual interest rate. Of course, the lower, the better. It tells us a lot more than just information about interest. Apart from the amount borrowed, the costs that we must pay to the lender also include various fees, commissions, etc. The APR includes them all. However, remember not to follow it when looking at a leaflet or advertisement. The APR they contain applies to people who have very good creditworthiness, others pay more. Certainly do not take the first, better offer. Before you decide on a specific loan, check what the competition offers and what loans it has in its offer. Thanks to this, you can be sure that the loan you have decided on is the most advantageous.

Payday loans and social loans

Payday loans and social loans

Payday loans are another form. chwilówki. As a rule, they bear high interest rates per year. However, their advantage is that they are easily accessible and require minimal formalities. Their feature is that they are taken for a short time, e.g. a month. So, despite the high annual costs, after 30 days, they will not be that large. Remember, however, to pay them back on time and not take them if we are not sure that we will have something to give them back. In the event of a delay, the penalties can be really high. There is also an alternative way to get a loan. There are exchange platforms on the Internet between lenders and borrowers. It’s about the so-called social loans. It consists in the fact that some people have free funds and want to earn more on them than on the deposit. With the help of such a platform, they can borrow money to someone, without the bank taking interest. The required creditworthiness and interest rates can vary a lot, so always check it out.

Mortgage

Mortgage

However, if we need much more money because we want to buy an apartment, we have to look for a mortgage, the so-called Mortgage. Let us remember that after the experience of the economic crisis, specifically since 2014, the process of granting such a loan is much more complicated. First of all, the lender will want to screen our income. The more stable our work is, the fewer months back they will be considered. When we are entrepreneurs, it can even be the last 3 years. The bank will carefully analyze the type of our income, whether it is permanent or if it comes from overtime, etc. Our expenses will be scrupulously analyzed. We must present all card statements and answer questions such as: are we eating out? We will also have to prove where we got the funds for the deposit. Several other criteria will also be considered, such as insurance policies.

UK loans – not so easy for a larger amount

UK loans - not so easy for a larger amount

So, as you can see, getting a loan in the UK is not a simple matter. Especially if we want to borrow significant amounts. The global economic crisis, which was caused by borrowing money too easily, changed everything. Of course, for small amounts, if you have not had problems with paying off other loans before, there is no problem. However, if we want to borrow larger sums, e.g. for a house or flat, the formalities can make you dizzy. In the UK, the institution of a broker is important, who will guide us through the thicket of offers and requirements and advise on the best solution. However, always remember to use common sense. Borrowed money does not fall from the sky, you must always give it back. You should not approach them as an alternative source of income. The loan should be treated as a last resort. Unless its repayment really is a small burden for the household budget.

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