You have set up a short-term or long-term goal but you don’t have enough money in your savings account to pay for it or them. That means it is time to apply for a loan. As per multiple statistics published by government as well as financial organisations in the UK, the number of individuals seeking out for credit has significantly increased in the last decade and is expected to grow even further.
Meanwhile, every new report generated by the Ministry of Economy and Finance points towards people making bad financial decisions mainly because of opting for guaranteed loans from online loan vendors and getting trapped in the credit debt. So, it is highly advised by finance experts that you stringently follow a few key points so as to take the full benefit of loans without hurting yourself.
1.Strategise your financial aspects
It is time for genuine introspection. While you go through your personal numbers, make sure that you have included all the income sources, expenses (daily and extra), and how much budget can you cut down comfortably. Keeping as many parameters as possible in your self-evaluation book is the best practice, to begin with not just for the time when you are taking a loan, but running down a few checks in a scheduled manner is a good practice altogether.
2.Research about the loan type, lenders and offers
So, you have finally made up your mind to apply for the loan. What next? Firstly, if you are a first-timer or even an experienced borrower, check your credit score, the collateral you can offer, formal income statement that you can present to the lender. Also, use the power of search engines to look for the lender whose offers are in line with your requirements. Make sure that the lender you choose is certified and has a good record. Loan is a two-way deal. They do their homework. So should you!
3.Time to send in a formal application
Once you have made up your mind, send in your request to get a quote. Almost every lender provides free quote. Again, don’t restrict yourself to just one. Keep your options open and send your application to a few lenders and then sort them out!
4.Evaluate the Lender and the Agent
If you are consulting the agent virtually or even physically, you still need to evaluate. Turn down the offer in case there is anything suspicious about the company or the agent. Clear all your doubts because in the end, you have to share your financial details. So, make sure that your decision has no flaws.
5.Negotiation is the key
People with a good credit score or even bad credit can at least negotiate with the agent about the interest rate, instalment duration and penalty information. For the same collateral, you can strike a loan of 60% of the total collateral valuation for bad credit and good negotiation skills can get the same property up to 70% or even 80% with a good credit. Know when the ball is in your court and this can make a significant impact on your loan amount.
6.Don’t get carried away
Banks usually take a few days for verification process while a direct lender can deposit the loan amount to your account within 24 hours. Thus, whichever lending party you choose, as soon as you receive the loan, it may seem too tempting to see all those numbers but beware! This is the most critical time for you to have a determined target and avoid overspending at all costs.
7.Don’t forget to schedule your installments
Last but not least, what borrowers generally struggle with the most is keeping up with the payment. You MUST pay your installments on time. The best method to ensure that is using online tools to remind you of the same. This can save you from paying multiple penalties because of any delay. Also, there can be times when a change in your financial conditions has affected your ability to repay. In such cases, never hesitate to contact the lender and depending on your specific circumstances, you can either ask for a grace period or can renegotiate your repayment duration.
Lending and borrowing is a complicated task for both sides. However, lenders are professionals and in case you feel the need to have someone on your side as well, a personal financial adviser can even the stage for you. All the aforementioned steps have been documented with the help of best-in-industry experts in as simple manner as possible.
Follow them appropriately, so that it is guaranteed that your loan would be an unsurpassed asset rather than being a scar retelling the blunders that could have easily been avoided in the very first place!