Loan Comparison FAQs

Loan Comparison - How To Make Sure You Get The Right Loan For You.

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Loan Comparison

When you set out to borrow a loan, you’ll realize that the biggest challenge isn’t finding a lender willing to advance the loan, but instead the loan comparison process, which can be tedious overwhelming. Banks and financial institutions offer numerous loan options and that doesn’t make the task any easier. You have short term loans, long term loans, unsecured loans, secured loans, and also certain other borrowing options such as car loans, personal loans, and loans for consolidating debts. So, you need to start by figuring out the type of loan you wish to borrow based on the purpose of borrowing and certain other parameters, which we shall soon discuss.

Once you have narrowed down the type of loan you wish to borrow, you can then compare proposals from various lenders. Money Pig makes this convenient by connecting you to multiple licensed direct lenders in the UK, which minimizes the chances of rejection and maximizes your chances of getting a fair deal. As your trusted financial intermediary, we consider it our responsibility to help you through the loan comparison process. So, here’s a complete guide for those who wish to compare loans and pick the most profitable deal.

Loan Comparison FAQs

  1. How to compare loans?
  2. How to plan repayments?
  3. What is the difference between a secured and an unsecured loan?
  4. What are my chances of loan approval with a bad credit rating?
  5. How can I increase my chances of loan approval?
  6. Will applying for loans affect my credit score?
  7. How to compare loans for debt consolidation?
  8. On what basis should I compare car loans?
  9. How should I compare payday loans?
  10. How to compare loans during an emergency?
  11. How to identify loan sharks and scammers?
  12. Are there loans without credit checks in the UK?
  13. How many loans can I borrow?

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How to compare loans?

Loan comparison is an intricate process, which requires you to plan ahead and make a rational business decision. Start by finalizing the exact amount that you wish to borrow and also the repayment period that you are comfortable with. Once you have done that, you then need to decide the type of loan that you wish to borrow — secured loan or unsecured loan. The rule of thumb is that smaller amounts do not require collateral and so you could consider borrowing unsecured loans. However, these are advanced for a short duration and usually charge higher interest rates. For larger sums, most lenders would only grant secured loans, which are advanced for longer periods.

You could also, choose to borrow loans for specific purposes such as car loans and loans for debt consolidation. So, based on your requirements you need to choose the specific type of loan and once you are through with that then it becomes much easier to start the loan comparison process. Next, you need to approach banks and financial institutions that offer the type of loan you are looking for and compare their offers based on key parameters such as interest rates, set-up fees, processing fees, and other costs. However, the downside is that applying to multiple banks and financial institutions could damage your credit score as most institutions run hard searches.

So, an easy way out is by filing a single loan application with Money Pig and listing out your requirements. We then find the best lenders from our network, who are willing to sanction that sort of a loan and connect you to them. This not only eliminates the risk of rejection but also helps expedite the process as we do the loan comparison for you. As we run only soft searches, there is no negative impact on your credit history.

How to plan repayments?

Loan comparison isn’t always about getting the lowest interest rates. It is also about the amount you wish to borrow and the repayment period that you are allowed. As longer repayment periods mean smaller monthly repayments, it is highly preferred by salaried professionals who have limited resources. On the other hand, self-employed professionals would be advised to do the same but with a favorable early repayment clause. That allows them the flexibility to repay the loan ahead of time and save up on the interest, without being forced to pay a penalty for the early repayment of the loan. Usually, lenders include such clauses to penalize the borrower for the interest amount that they lose out on, due to early repayment. If you have made wrong borrowing decisions in the past, then Money Pig offers loans to consolidate debts, which you can borrow in order to restructure your debts.

What is the difference between a secured and an unsecured loan?

Loan comparison begins with the decision to borrow a secured or unsecured loan. A secured loan is a type of loan which requires you to furnish collateral, which can be forfeited by the lender in case of non-repayment of the loan amount. These are usually larger amounts that you borrow to buy real estate or to consolidate your existing loans. On the other hand, unsecured loans refer to short term borrowings such as payday loans, personal loans, etc… which do not require you to furnish collateral. Unsecured loans are usually sanctioned after checking your credit score. However, if you have a low credit score, you may not be able to borrow an unsecured loan from a bank or a financial institution, but Money Pig’s direct lenders do advance bad credit loans. You can apply for one and we will send you suitable offers regardless of your credit scores.

What are my chances of loan approval with a bad credit rating?

We know that a bad credit score can make it difficult to borrow a loan in the UK and endanger your financial future. Some mistakes and wrong decisions made in the past can have a devastating impact on the rest of your life, but that’s only until you connect with Money Pig. We help individuals with their financing requirements, regardless of their credit scores. So, even if you have a bad credit score, we have quite a few licensed direct lenders who would be willing to offer you loans. However, we encourage you to go through our loan comparison tips to make the right borrowing decision, which can eventually help improve your credit score.

How can I increase my chances of loan approval?

You can increase your chances of loan approval by checking the maximum loan limit that you qualify for. This is calculated on the basis of your income, occupation, type of employment, age, and certain other factors. Most people make the mistake of applying for a higher loan amount and are rejected for not qualifying for it. It is always recommended that you spend some time checking the maximum limit that you can borrow and then apply for at least twenty percent lesser than that. Also, avoid all actions that may have an adverse impact on your credit score.

This includes applying for too many loans over a short period of time, which could have a negative impact on your credit score. Therefore, Money Pig teams up with direct lenders that offer all types of loans. You can easily connect with those lenders through a single loan application that you can fill and submit on our website.

Will applying for loans affect my credit score?

Loan comparison is an extremely important process, but the fact remains that applying for too many loans within a short period can have a negative impact on your credit score. Most banks and financial institutions run hard searches, that show up in your credit history. Nevertheless, you need to compare loans from multiple lenders before borrowing one. Money Pig helps you do this with a single loan application that you can fill in and submit on our website, within minutes. We then submit this to our network of direct lenders, who run only soft searches, which does not negatively impact your credit score.

You then get quotes from multiple licensed direct lenders, which you can negotiate and compare. Finally, you can choose one based on your preferences, and just before the funds are released, the direct lender performs a hard credit check and immediately releases the amount. Since you have technically filed only one loan application, your credit score is much safer when you apply through Money Pig. Also, our lenders help you keep it that way by offering flexible repayment terms and conditions, which varies from one loan agreement to another.

How to compare loans for debt consolidation?

Debt consolidation means consolidating multiple debts into one, and that involves borrowing from a single creditor to pay off all your other creditors. So, you need to put your trust into one creditor, and therefore loan comparison and profitability evaluation play a critical role. To begin with, you need to choose the type of debt consolidation loan that you wish to borrow. It could be a secured debt consolidation loan, which is ideal for larger sums or the unsecured debt consolidation loan, which is ideal for smaller borrowings. However, most premier banks and financial institutions won’t offer you anything but a secured debt consolidation loan, which often requires you to provide your home as collateral.

At Money Pig, we offer both secured and unsecured debt consolidation loans, and you can choose one based on your requirement. Once you have done that, the next step is to check for the interest rates, set up fee, and maximum borrowing period offered. You need to compare loans on the basis of these parameters. In most cases, we recommend that you choose the longest repayment period permitted because having multiple debts indicates that you are going through a financially strenuous phase. So, by opting for a longer loan duration, you can bring down your monthly repayments. However, your interest rates may spike up, so remember to compare loans based on that. Again, the set-up fee could be between one and six percent, so choose the lender who is willing to offer the lowest setup fee. This will help reduce your APR, which is calculated on the basis of aggregate borrowing costs.

On what basis should I compare car loans?

Car loan comparison can be overwhelming because of the many financing options available. Straight from your dealer to your bank, everyone who lends a car loan appears to be eager to lend you one. However, you need to closely compare car loans before choosing one, but before that, you need to decide how much money you can dedicate towards a down payment, monthly repayments of the car loan, after taking into consideration certain other expenses that come with owning a car. Since cars depreciate much faster than any other type of asset, we recommend that you borrow a car loan for a shorter period. Once the loan is repaid, you get its ownership and would be able to sell it and use the funds to buy a new one. Alternatively, you can also borrow a personal loan to buy a car and own it right from the start.

Coming back to car loan comparison, we recommend that you start by comparing car loans based on how much down payment the lender requires you to pay. You then need to check out the interest rates, and car loan processing fees and compare the car loans on that basis. Once you are done with all of that, you must choose a car loan lender who offers you the most favorable prepayment clause. That’s because most people choose to sell their cars and settle the loan amount much before the loan period ends. They do this to get the car’s ownership and then transfer it to someone else, who wishes to buy it. While doing this, you do not want to end up paying high prepayment penalties that most lenders charge to compensate for the interest lost.

How should I compare payday loans?

Payday loans are a unique type of short-term borrowing, which is advanced for a relatively smaller duration and at very high-interest rates. Usually, these are borrowed for a few weeks to a few months ahead of the paycheck in order to pay for utilities and bills. The unique nature of these loans makes it inevitable to compare it solely on the basis of APRs. However, do keep an eye on the late payment and debt collection clauses to avoid trouble in the future. Money Pig’s network of direct lenders includes FCA licensed lenders who are bound to follow the debt recovery and debt collection guidelines laid down by the FCA. This ensures safe and legitimate borrowing of payday loans.

How to compare loans during an emergency?

While dealing with an emergency situation, loan comparison may not always be possible, but if it is, then you need to take the interest rates and the loan duration into account. Also, borrow only as little as you need because lenders often charge higher interest rates on emergency loans. At Money Pig, we completely understand that it may not always be convenient to compare loans in an emergency situation. So, we do the loan comparison for you and pull out the best offers from our licensed direct lenders. This not only helps you get a fair deal but also minimizes the risk of falling prey to a loan shark.

During emergencies, most people tend to make the wrong decision of borrowing the loan from a random lender because their bank takes a longer time to process the loan. However, due to the urgency, they forget to verify the lender from whom they wish to borrow the loan. This causes a huge mess because there are so many illegal lenders out there and therefore, we bring you a whole bunch of FCA licensed direct lenders willing to lend you a helping hand. Our lenders offer emergency loans such as fast loans, payday loans, same-day loans, student loans, and certain other options. Some of our lenders would be willing to advance emergency loans even on weekends and public holidays. So, in our opinion, you must compare emergency loans based on feasibility and interest rates.

How to identify loan sharks and scammers?

With the boom in electronic communication, most people rely on a quick online search for their borrowing needs. While there are quite a few legitimate and ethical lenders out there, you’ll also find an equal or higher number of scammers trying to grab your bank details. Such persons could have different intentions and while some might be out there to commit identity thefts, there are also those who want to financially trap you. These persons are not licensed to lend money in the UK and operate illegally, by reaching out to potential borrowers and luring them into tricky deals.

You can easily identify loan sharks and scammers by looking up for them in the online FCA register. Always make it a point to ask for the concerned person’s name and look that up in the register to confirm that lender’s status. Also, by clicking on the name of the lender, you would be able to access the address, phone number, and official website of that particular lender. Ensure that all your interaction is with the same person and all the emails are coming in from the official website’s domain name and extension.

Are there loans without credit checks in the UK?

In the UK, the Financial Conduct Authority (FCA) regulates all financial service providers and has made it obligatory for lenders to perform credit checks before advancing any type of loan. Any bank, financial institution, or lender who does not comply with this requirement would be violating FCA’s guidelines and could be held liable for the same. While there is no way for legitimate lenders to entirely avoid credit checks, there are some ways to minimize their impact.

For instance, you may have heard that applying for multiple loans within a short span can hurt your credit score, which is true. However, that happens because when you individually apply to multiple lenders, each of them performs a hard credit check. So, when they check your credit ratings but do not transact with you, it gives out negative cues to the credit rating agencies. Therefore, we have found a legitimate and convenient solution to this problem. Money Pig acts as an intermediary and connects you to several FCA licensed direct lenders. These lenders agree to run only soft searches until you explicitly express your desire to accept the loan according to mutually agreeable terms and conditions. Once you and the lender reach a consensus, then the lender performs the hard credit check as the final step before releasing the funds.

How many loans can I borrow?

Banks and financial institutions calculate your borrowing limit according to their internal protocols and are more concerned about that limit than the number of loans that you owe. So, if you have reached that limit, then they may reject your loan application. That’s because lenders calculate your repayment capability and if you have too many dependents and debts, then they consider you to be incapable of repaying and do not advance the loan. If you are struggling financially, then even in such situations Money Pig may be able to help you. Some of our direct lenders advance loans to those stuck in such situations but depending on the amount you wish to borrow, you may have to furnish security or guarantors.

For those who lack financial aptitude, loan comparison could be a tough task to accomplish and if that sounds like you, then no worries. At Money Pig, we help you make the most profitable business decisions by connecting you to the most appropriate lenders. So, if you know your requirements but do not wish to do the loan comparison yourself, we could do that for you. To know your best borrowing options, Apply Now.

 

 

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