Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk
On Thursday, 2 November 2017, Bank of England Governor Mark Carney and the Monetary Policy Committee (MPC) decided to hike the bank rate by 25-basis points. This was the first time in 10 years that the Bank Rate increased. It has far-reaching implications for the UK economy, notably for UK households. In addition, according to The Guardian, consumer debt has risen 7% over the last 5 years, making it hard for families to stay afloat, or even make it until their next payday.
If you are on the market in search of a same day loan, a personal loan, or a line of credit, you will invariably want to line all your ducks up in a row, before you sign on the dotted line. A myriad of personal loan providers currently offer their services to UK clients, but only a handful of them are worthy of consideration.
• Ensure that the loan provider is fully licensed and regulated to offer financial services to clients in the United Kingdom. FCA (Financial Conduct Authority) regulation is mandatory. This ensures that you’re dealing with a credible loan provider, and that there is recourse in the event of a dispute, complications, or noncompliance.
• Customer service ranks highly when evaluating loan providers in the United Kingdom. It is advisable to contact the personal loan provider, same day loan provider, or business loan provider’s customer service team to determine how responsive they are to your queries. This should be done before you apply for a loan, since the responsiveness and professionalism of the customer service department oftentimes separates the loans from the best loans.
• Depending on personal preferences, you may find it valuable to apply for a loan payment protection to ensure that your loan is paid off if you lose your job, or become ill. Once again conduct comparative shopping to ensure that you get the best personal loan protection insurance.
• Recall that personal loans are unsecured loans. It is important that the loan provider can meet your borrowing requirements. As a borrower, you are limited in your overall risk, since your mortgage is not at stake. Be advised that your credit profile may be negatively impacted if you default on your payments. It is important that you can make good on your loan payments by checking how much interest you will be paying with a loan calculator.
• Be sure to evaluate the APRs (Annual Percentage Rates) of the loan providers you are considering. The higher the APR, the less favourable the loan. Your credit profile vis-à-vis your credit score often determines the rate you qualify for. A good credit score typically entitles you to a better interest rate. The APR that you are offered will be determined by your credit profile specifically. Your credit score is a representation of your trustworthiness to a lender, and they will award you the best possible rate given your credit score.
• The loan rate is arguably the most important component of a personal loan. The UK currently has a bank rate of 0.50% – low by historical standards. However, the loans market rates are going to be higher owing to the increased risk that these moneylenders are subject to. For example, you will notice that top loan providers limit your pay back to 100% of your original loan amount, even if you are late in paying. The leading same day loan providers typically offer up to £1,000 in loans. Instalment loans have a 2-month duration and a maximum of 12 months. Payday loans are repaid within 5 days and a maximum of 38 days. Generally speaking, the maximum interest rate you should be paying is 0.5% per day. That means for every £100 you borrow, you can expect to add on £0.50 per day in interest.
• Your ability to repay your loan is extremely important. With unsecured loans, your repayment schedule is fixed. You will know exactly how much you will be paying from day-to-day, week to week, or month to month. It is strongly advised to use a loan calculator for unsecured loans to compare different loan providers to confirm that you’re getting the best rates. Information to be entered includes the amount you wish to borrow, and your repayment term.
• Are there any upfront fees that you need to be paying? You can win in the competitive loans market by reading and researching personal loan providers. If there are any upfront fees, you need to ascertain whether this is beneficial to you.