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Do I Really Need A Loan? - Your Questions Answered!


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Do I Really Need A Loan?

The coronavirus pandemic has slowed down businesses across the globe — From stock markets to oil prices, there has been a constant dip in all sectors of the economy due to the very nature of this dangerous virus. With compulsory lockdowns being effective across the globe, businesses have experienced economic strain like never before. As a result, the financial services sector is also affected as there is very little lending going on due to a lack of liquidity in the market. Also, potential borrowers are highly concerned about the slowdown and whether they should borrow a loan during the coronavirus recession. So, if you are wondering whether you really need a loan right now, or whether to wait for a while, then you must know that nobody in the financial services sector is sure of how or when this is going to end.

If you have already borrowed a loan and can currently afford to repay it, then consider doing that. There are so many people who are doing the best they can to repay their loans before they lose their jobs. With so many people hurrying up and repaying their loans, you may think whether you really need to borrow a loan. Although there is no definite answer to this, it depends on your current circumstances. At times, one has no choice but to borrow a loan to buy necessities and pay their bills.

If you are going through such a grim phase, reconsider your decision to borrow a loan and explore your other options such as applying for government benefits. Alternatively, you could also consider borrowing a loan from family and friends as that won’t hurt your credit score even if you miss a couple of repayments. If that does not seem like a workable option, then you can always turn to us. At Money Pig, we believe in helping our customers through all times. So, if you are struggling with your finances, we would be glad to process your loan application.

FAQs | Do I Really Need a Loan?

  1. How to decide if I really need a loan?
  2. Do I really need a loan to buy a car?
  3. How much loan should I borrow?
  4. Why should I borrow a loan from Money Pig?
  5. How can I borrow money with bad credit?
  6. How can I borrow money quickly?
  7. Do I really need a loan to start a business?
  8. I have several debts. Do I really need a loan to manage my debts?
  9. Do I really need a loan to buy a home?


How to decide if I really need a loan?

Borrowing a loan almost always comes with additional costs attached to the principal amount. This is charged in the form of interest, set-up fees, processing fees, and other costs. So, you must carefully evaluate your finances and determine whether you really need a loan or can do without borrowing one. Especially, during this economic slowdown when most people are trying to pay off their liabilities before they end up unemployed. While it may not be the best time to borrow need-based loans, you must still consider borrowing one for future investments, but only if you are willing to take the risk.

Most people have a very limited outlook and consider loans to be a need-based borrowing. As a matter of fact, loans provide liquidity to businesses and individuals which can help them grow financially. So, loans do not have to be a need-based borrowing and can instead be borrowed to create liquidity for investments. Since there is an economic slowdown right now, your financial decisions would have a lasting impact on your finances. So, the best way to go about it is by taking a calculated risk depending on your income streams and current finances. Therefore, you need to know your priorities in order to decide whether you really need a loan.

If you are currently struggling with your finances, then this could be for two reasons — to cover up your living costs or to repay your previous debts. For your living expenses, consider applying for government benefits such as universal credit. However, if you are worried about your previous debts then we recommend that you consider consolidating them into long-term borrowing, which would help bring down the monthly payments. Money Pig’s lenders offer loans to consolidate debts that come with fixed interest rates. So, by borrowing such a loan and reducing your monthly repayments, you may even become eligible to borrow additional loans and can invest them while the economy is down.

Do I really need a loan to buy a car?

The UK has many car financing options available and so you do not really need a loan to buy a car. In fact, you can buy a car both with and without borrowing a loan. If you wish to borrow one, then you could opt to borrow a car loan or a personal loan. Most people choose to borrow a personal loan to buy their car because it gives them ownership of the car right from the start. On the other hand, car loans are designed differently, and the ownership of the car lies with the lender of the car loan. You only get to own the car after repaying the car loan entirely.

Money Pig can connect you to several lenders who would be willing to advance car loans and personal loans at the most competitive interest rates. Another option that we offer is meant exclusively for students pursuing full-time education in the UK. This option is categorized as student loans, which is pretty much like a personal loan advanced to students. Some of your other car financing options include hire purchase, personal contract purchase, and the very obvious one, your savings. Out of all the car financing options, you need to rule out purchasing one with your savings because you need to save that for the tough times. Nevertheless, you could always use a part of your savings to pay for the car.

In the case of hire purchase, you need to make a down payment or a deposit of around ten percent of the car’s value and pay the rest through fixed installments for a pre-determined period. Again, you receive the ownership of the car only after making the final payment. Personal Contract Purchase (PCP) is quite similar to the hire purchase arrangement, except for the fact that there is a slightly different arrangement with regards to trading off the car at the end of the repayment period. However, the biggest drawbacks of both hire purchase and PCP are the delayed transfer of ownership and higher costs. Usually, the cost of buying a car with a short term loan turns out to be much cheaper than doing so through hire purchase or PCP. Plus, choosing something as flexible as a personal loan gives you the immediate ownership of the car.

How much loan should I borrow?

Most people who wish to borrow a loan aren’t even sure of how much they wish to borrow, leave alone evaluating their affordability. They presume that it is always right to borrow the maximum amount required to buy the asset or as much as they qualify for. Well, that is not the right way of doing things and regardless of how much loan amount you qualify for, your individual needs are something that you must keep track of.

First, you need to check your affordability to repay the loan promptly and only then consider borrowing it. Banks are only going to look at your past earnings to evaluate your loan application, however, it is you who knows things like how stable your job is and how long you intend to work. Also, you need to make a decision based on the purpose of borrowing. If it is need-based then there is little room for you to rethink about it. All you can do in this case is to borrow as little as you can.

On the other hand, if you wish to borrow the loan to buy an asset such as a car, stocks, real estate, etc… then ask yourself if the asset is going to be revenue-generating or not. Also ask yourself if you could wait for a while, save up enough, and then buy the asset with your own money. At least check if you can put in the majority of the funds from your pocket and limit your borrowings without spending all your savings. Minimizing your borrowing would help minimize the costs that you incur in the form of APR.

Why should I borrow a loan from Money Pig?

Money Pig is one of the most versatile financial services intermediaries that has a wide network of reliable and licensed direct lenders. We offer several short term and long term loans that address the needs of a diverse set of customers. So, if you really need a loan then you can borrow one regardless of your background, credit history, employment type, income, etc… At Money Pig, we believe in making borrowing convenient and hassle-free. Therefore, we accept online loan applications through our website, which you need to fill and submit for free. We then process your loan application and connect you to lenders willing to advance the type of loan that you wish to borrow.

Money Pig offers unlimited borrowing options and some of the most popular ones are bad credit loans, payday loans, no guarantor loans, fast cash advances, emergency loans, and student loans. As you can see, we offer the most diverse set of loan options. Most importantly, these loans are offered by direct lenders who are licensed by the FCA. So, you get offers from legitimate lenders and can apply for them from the comfort of your home without any personal visits to our offices. Also, our loan processing is absolutely free and involves minimum formalities. We limit the formalities only to those which are mandatory for all the financial service providers in the UK.

How can I borrow money with bad credit?

When you have a bad credit history, borrowing a loan in the UK can be a nightmare. Usually, you get the bad news about your low credit score from a bank or a lender, when you apply for a loan and they do the initial screening. Most banks would ruthlessly refuse to sanction your loan without any further discussions. So, if you have a bad credit score then the first question you need to ask yourself is whether you really need a loan while your finances are messed up. You must understand that borrowing one is not going to be easy unless it a small amount that you wish to borrow.

In the UK, most people with bad credit fall prey to loan sharks and transact with them without being aware of their illegitimate motives. Loans sharks are illegitimate lenders who trick potential borrowers into believing that they can advance loans without credit checks and then charge high-interest rates. You must know that every financial services provider in the UK needs to mandatorily possess an FCA license to carry out operations in the UK and must follow the rules and guidelines laid down by the FCA. One of those guidelines issued by the FCA requires all lenders in the UK to run credit checks before advancing loans. So, there is no way you can borrow money legally in the UK without going through a credit check.

As the financial services industry in the UK is regulated by the Financial Conduct Authority (FCA), you must transact only with those lenders who are licensed by the FCA. You can confirm this by looking up on the online FCA Register. Screening lenders for their license status can be a lengthy process, so instead of doing that you can submit your bad credit loan application to Money Pig. Since all our direct lenders are licensed by the FCA, it helps save your time and effort.

How can I borrow money quickly?

If you have a pressing need for some urgent cash, then consider borrowing a loan from your friend, relative, or your employer. If none of those options seem viable at the moment, then its time to turn to your bank. Find out if you qualify for an overdraft on your bank account and confirm the maximum limit. You could also check the limit of your credit card and use it but only if you can repay the amount before the interest piles up. Sometimes, none of these options may be available and that’s when you need to consider borrowing a loan.

Money Pig’s direct lenders offer many emergency loans that can be sanctioned within a couple of hours without any personal meeting with us or our direct lenders. Unlike banks and other lenders, we believe in minimizing the processing formalities for such loans to speed up the process. Some of our emergency loan options include fast loans, cash advances, same-day loans, student loans, etc… So, depending on your needs you can apply for any of those loans. To apply for any of these emergency loans offered by us, simply submit an online application mentioning the urgency and we will process it on a priority. Once your loan is approved, the funds are directly transferred into your UK bank account within minutes.

Do I really need a loan to start a business?

No, you do not need a loan to start a business, but most people choose to borrow a loan. They use the loan amount as capital in order to maintain liquidity and to limit their liability. Usually, those who start a business do so through another entity which could be a sole proprietorship, partnership firm, company, etc… This makes it easier for them to maintain their individuality and to ensure that the business does not affect their personal assets. However, if you are just starting off your business with absolutely no previous financial records then you can raise capital through direct investors or by borrowing a personal loan. Once you have filed tax returns for a couple of years and can showcase a sound track record of your business entity, then you can borrow a loan on that basis. Money Pig has several direct lenders who lend personal loans with no restrictions. This means you can use the money for whatever purpose you wish to, even to start a business.

I have several debts. Do I really need a loan to manage my debts?

If you have several debts then that is indicative of your poor finances, so it is evident that you are trying to minimize your liabilities and are therefore considering borrowing a loan to consolidate debts. However, consolidating debts into a single loan is not the only debt management option that you have. If you are going through some serious financial troubles you could also consider debt settlement by initiating negotiations with your existing creditors.

Debt consolidation and Debt settlement are two very different debt management strategies that you can opt for. The choice depends on your current financial condition and what you intend to achieve. While debt consolidation refers to paying off multiple debtors with a single loan, debt settlement refers to negotiating the amount you owe to your creditors and arriving at a one-time settlement. Often, the debt settlement amount is lesser than what you owe to the creditor. So the success of debt settlement depends on the willingness of the creditors to forego a part of what you owe, in exchange for a lumpsum settlement.

To sum it up, debt consolidation is ideal to minimize the borrowing costs while debt settlement helps minimize the liabilities. So, if you are currently paying high interest on some of your loans or if your monthly repayments are high, then you can consider lowering them by borrowing a long term loan to consolidate debts. On the other hand, if you can arrange for a lump sum and convince your creditors to settle for an amount lesser than you owe them, consider debt settlement. Money Pig’s lenders offer attractive deals on loans to consolidate debts. So, if you wish to choose this sort of arrangement then submit your online loan application on our website.

Do I really need a loan to buy a home?

No, you are not required to borrow a loan to buy a home in the UK. There are several ways of doing this and the easiest one is to save up enough and purchase a home with your savings. This may take some time and so speed up the process, you could invest your savings in stocks, smaller real estate, and other assets that are likely to appreciate over time. Eventually, you can liquidate those assets and use the funds to buy your home. However, doing this would require long-term financial planning and commitment. By not borrowing a loan to buy a home you end up saving borrowing costs such as interest, processing fee, set-up costs, etc… that come with a loan.

Another way to get your dream house without borrowing a loan is by entering into a ‘renting to own’ contract. This is a special arrangement between the homeowner and you. In this type of arrangement, you must make an initial deposit and rent the house for a certain period of time. This type of arrangement gives you the option to buy the home after renting it for a pre-determined period of time and paying additional costs. This type of arrangement also qualifies you for some attractive tax deductions.

Borrowing a loan is never an easy decision, and more so when the global economy continues to decline. So, if you are confused and are tired of re-thinking whether you really need to borrow a loan then get in touch with our experts. Our financial experts will send you quotes that will help you make the right decision. For further details, Apply Now.