Finding The Right Loan For You

Some of us feel we need a little extra help when it comes to affording certain things – be it a car or a house.

With a wide variety of different financial options to suit different spending plans, taking out a loan to help your finances has never been easier. But what should you bear in mind when looking for loans?

Firstly, it is advisable to check your credit rating in order to assess your credit risk. Your credit rating helps lenders determine whether you are eligible to take out a loan.

Analyse your financial situation, drawing up a budget and double-checking your credit file before signing up to a loan plan. Be sure to check all aspects of the deal you want - from APR rates right down to the small print.

If you're looking to secure Payment Protection Insurance (PPI) it is best to get quotes on loans both with and without PPI.

When checking your credit file, be on the lookout for any unfamiliar transactions – these could be an indication of identity theft and will certainly hinder your chances of borrowing in future.

There are two basic types of loan available on the market - unsecured and secured – both of which have different criteria for applications and offer different payment plans depending on your situation.

Unsecured loan plans split payments into monthly instalments, which you pay up until the end of the loan term, which usually lasts no longer than 10 years.

Rates are fixed from the outset of the loan term but offers vary depending on your credit score, these fixes make it easier to budget in order to meet repayments. It's always best to shop around for the best deal on these plans, rather than rushing into the first one that comes along.

Secured loans are only available to homeowners. However for some it may be the only option if they've found themselves refused for an unsecured loan.

Secured loan plans offer the chance to borrow much more than unsecured loans, with reduced monthly repayments over longer periods of time; however rates are variable and will change depending on interest rates.

As your property will be secured against such a loan type, there is the added the risk of repossession if you cannot afford to keep up with monthly repayments. It's advisable to thoroughly assess your financial situation before committing to such a loan.

If you're rejected for a loan, don't be afraid to enquire to the lender to find out the reasons why, and keep an eye on your credit rating as any refusals will show up on your record and could harm any future applications.

By doing your research beforehand and drawing up a budget, taking out a loan needn't be as complicated as you think.

But it's always best to be careful and seek advice before committing to such financial plans.

When it comes to making an application for a loan, your credit rating can play a huge part in the bank's decision to lend you the money required - whether you've your heart set on home improvements, a new car or even some extra cash to treat the family with.

However, be very careful with your applications. If you've a bad credit rating, chances are that you're not going to be approved - but making several applications to different companies in quick succession can put a further damper on your credit score. Multiple applications can seem like an act of desperation, which won't help your cause and also give your credit profile a bad name.

If you're struggling to become approved, it could be worth sitting down with a copy of your credit rating and have a good long think about how to repair some of the damage, for any effort you put in will also be reflected on your score - basically if a lender can see that you are sensible with your financial planning, they're more likely to take a chance and lend you money.

If you feel you may need a little more help in getting your credit score sorted, don't be afraid to talk to a debt management agency or a debt advice helpline in order to get yourself some useful advice to get your finances in order.

Bad news for first-time buyers today after one of the UK's leading lenders pulled their '100% mortgage' deal. As house prices in the UK have recently suffered a slump and with growing uncertainty in the mortgage sector - many borrowers are turning to loans in order to save money.

And with more of us turning to fixed-rate mortgages, the banks appear to be struggling to cope with the influx as we flock for cheaper mortgage rates.

If you are looking to change your mortgage plan or take out a loan to help with your situation, it pays to budget in order to save yourself trouble in the future. Shop around for the best deals and take care not to jump into the first deal you come across.

With the ongoing credit crunch affecting the financial markets, there are uncertainties for both banks and customers alike, finding an affordable deal on loans and mortgages can be a difficult process.

So what can you do to ensure that you're getting a deal that right for you when searching for a personal loan?

Research is the key, and one of the the main pieces of advice is to ensure that your credit record is clean and up-to-date, and there are a number of agencies that offer the chance to obtain a copy of your credit record for a small fee.

Take some time to compare different loan schemes and draw up a budget for yourself in order to help analyse how much you can set aside each month, this will help you determine how much you can afford to borrow and over what length of time.

However, don't be tempted to apply for several loans at once, as this could reflect badly on your credit score in future, and remember that factors such as missed payments, CCJs and bankruptcies will remain on your credit record for up to 7 years - such blemishes can seriously affect your chances of succeeding in future applications.

By keeping an eye on your credit rating and making changes to ensure that it remains clean, you can help your chances during the process of applying for personal and secured loans.

Checking your records on a regular basis can also help to identify any fraudulent activity that might be taking place on your account. With levels of online fraud on the increase it can help put your mind at ease as well as helping you keep track of any payments on loans and credit cards that you may already have - and ensuring those are kept up to date and paid for can boost your chances for future applications.

Lenders will usually look for those who can handle their credit well, so keeping a healthy credit score can be beneficial for both lenders and customers.

If any special circumstances – such as serious illness – should arise during the term of your loan, inform your lender so that changes can be made to your policies in order to make it a little more manageable for you. Most will be sympathetic to your circumstances, but it's vital that you let them know.