Few people get to talk to industry professionals about loans and borrowing – so we’ve compiled a list of lesser known facts from people on the inside.
If you want to know how to get approved for a loan, the truth about where to find the lowest interest rates or strange things that can impact your credit rating, read on:
“You can haggle”
People are normally quite accustomed to a discussion about the ‘best price’ when they’re shopping for a car or a house – but few people know you can have similar discussion with loan providers. Ultimately, they’re a company selling you a product, so feel free to ask for the best possible price they can provide.
What that normally means to a loan company is the interest rate they offer. If you think you can get a better rate elsewhere then ask if they can match it. They might need to see proof that you can get that rate and the same conditions – but assuming you can, there’s nothing to be lost be asking – some will even beat that rate to win your business.
“Credit providers make mistakes”
If your credit rating is lower than you think it should be, it might be the fault of a company you have previously had credit with – and not your own.
Neither humans nor computer programs are accurate 100% of the time, so if there’s been an oversight and your final payment isn’t processed, or someone’s forgotten to tick a box that confirms your account is closed then you’re possibly suffering for no reason.
Your credit score affects whether or not lenders will offer their products and, if they do, at what rate you would be accepted. You’re entitled to see your credit report – and the big credit referencing agencies will provide it for you for just a couple of pounds. Check it carefully, mistakes can cost you money.
If you spot something you think is incorrect, question it with the company that provided the product. At the very least, it’ll be put as ‘under review’ until it’s checked properly, meaning it won’t affect any decisions during that time.
“Bending the truth can get you in big trouble”
There are lots of areas that people don’t think will be checked when they submit the information required to obtain a personal loan – but be very careful, not being 100% truthful can get you into a lot of a hot water.
It might be tempting to stretch the truth slightly when it comes to what your income is or what you’re going to use the loan funds for. The truth is, lying about any of these things can constitute fraud. The lender will often have the ability to recall a loan if it comes to light that any misinformation has been used in securing the loans – and in some cases criminal charges can be brought.
It’s not common, but not totally unheard of that people face charges. Be very careful to ensure you’re 100% accurate with your information.
“A personal loan looks better on your record than payday loans”
When lenders look at your credit history they can see what types of financial products you have previously used. A lot of lenders take a very dim view of payday loans.
Before looking any further, a payday loan can be an indication that an individual isn’t able to adequately budget through the month. Payday loans are traditionally used to get through short lean periods and repaid immediately upon your next pay cheque clearing. This can be a warning sign for a lender.
If a lender sees subsequent payday loans, this is a huge warning sign. If a person is stuck in a cycle of borrowing with large interest rates, this can be very difficult to break free from. Seeking debt advice if you’re in this situation can be vital to breaking free before further financial crisis occurs.
On the other hand, personal loans indicate an individual is able to handle their finances to allow for repayment at a steady and frequent rate. Seeing the application for and successful repayment of personal loans on a credit rating can actually be better than seeing no credit at all.