If you are a student looking to complete your tuition fees so you can start the next academic session with a completely clear conscience or you are a small business owner looking to get a small loan to buy some new products, you must have considered getting a loan sometime. While loans can be a lifesaver in many scenarios, if not properly planned out, your loan can end up being an albatross weighing on you a lot longer than you would like. This post details some of the things you should look out for before you take up a loan with any bank or credit facility in the UK.
When applying for a loan, your location determines where you would go to with your application. Students in North Ireland, for example, have no business applying at the Student Loan Company as the SLC is only for those students in England. North Ireland students are expected to apply at the Education and Library Board. This is because there are certain provisos maintained by your location that have to be followed by law and they may be different from that found in other locations. Find out from the banks or loan facilities in your location, what is necessary, before you apply for the loan.
The interest rate
While many banks or loan facilities usually post a credit or loan rate at the beginning of the year, they hardly ever adhere to the rate posted, and it might require some negotiating to get them to a figure that is favourable for you. Ensure you find out the actual rate the bank offers and if it will be necessary for you to open an account at the bank before applying for a loan there.
Your Credit file
The reason you should find out the actual rates being offered before you apply is because, every application you make is recorded on your credit file. A number of the banks which offer the lowest credit rates often turn away applicants because of the number of applications on their credit file. According to telegraph.co.uk, this amount is up to 90%. Be careful how many times you apply for credit; it can affect your chances of getting a good deal.
When applying for a loan in the UK, you are expected to have certain particulars readily available. Failure to provide a national insurance number, passport number and bank sort code often results in you being denied the loan. Ensure you have all your necessary particulars ready before you apply for the loan.
Parents’ or partner’s income details
When applying on the grounds of household income, ensure you have the permission of your parents or partner to share their income details. This is because those details will be required of you to complete the application form.
If you follow these details listed above, you can be assured of a high chance of getting your loan application approved by whatever body you apply to.