Securing A Loan at The Best Rate
Worried about securing a loan at the best rate? Money Pig can help you identify some of the most lucrative borrowing options in the UK. By choosing us for your borrowing needs, you can be sure of making financially rewarding decisions. At Money Pig, we strive hard to deliver excellent financial services, and therefore venture deep into the UK’s financial services industry and handpick the best service providers. Over time, we have built a robust network of highly ethical and principled direct lenders, who hold the necessary licenses to lend money in the UK.
Money Pig provides a platform that connects genuine potential buyers with reputed lenders that are approved and regulated by the Financial Conduct Authority (FCA). So, we do the initial legwork for you and let you compare offers from multiple lenders side by side and make a well-informed decision. With a broad network of FCA-licensed direct lenders, we bring you a one-stop solution for all your borrowing needs.
FAQs about Securing A Loan at The Best Rate
- How can I get low-interest loans?
- Does the principal amount affect the interest rate?
- For how long should I borrow a loan?
- Can Money Pig help me secure a loan at the best interest rate?
- Does my credit score affect my interest rates?
- How can Money Pig help me secure a low-interest loan?
- How can I get a better interest rate on personal loans?
- How can I secure a low-interest loan to buy a car?
- How can I secure a loan at the best rates with a bad credit history?
- How can I improve my credit ratings?
- How should I compare loans to get the best interest rates?
Lenders advance credit for the sole purpose of earning interest, which is the cost that you agree to bear in exchange for borrowing and using the lender’s money. So, you can forget about zero-interest loans because there’s no way someone is going to lend you money without a profit margin. In fact, most zero-interest loans are marketing traps that you must avoid if your goal is to secure a loan at the best rates. Instead, you must shift focus to shortlisting lenders you wish to transact with and start requesting quotes from them. You can then compare those offers and pick the most profitable deal.
Money Pig takes this to yet another level by connecting you with multiple direct lenders through a single loan application. So, unlike when you apply to banks or other financial institutions, you need not submit multiple individual loan applications. Now that’s about getting quotes, and once you have them, then you need to get to work and begin the evaluation process. This involves the segregation of offers on the basis of costs involved in getting the loan, which includes interest rates, set up fee, loan processing fees, and certain other fees. Based on this, you can then compare the offers and choose the most profitable option.
Yes, the principal amount that you intend to borrow has a direct impact on the interest rate that you would be charged. While this rule of thumb applies to most loans that you borrow, it doesn’t apply to payday loans. In the case of all other loans, banks and lenders in the UK offer tiered interest rates, which refers to interest rates that vary based on the amount borrowed. Usually, there is an inverse relationship between the amount borrowed and the interest rates charged. So, the more one borrows, the lesser interest rates are charged by the lender.
This is to encourage the borrower to borrow a larger sum so that the lender can make more profits in the form of interest and loan set up and processing costs. So, one way of securing a loan at the best rate is by borrowing a higher amount. Nevertheless, this could get you into some serious trouble if you borrow more than you can repay. So, be prudent while deciding how much you wish to borrow depending on your current income and existing liabilities.
We recommended that you look at your bank statements to decide how much money you can dedicate towards monthly repayments. Based on that, you must decide the duration of your loan because that has a direct influence on your monthly payments. To better illustrate this, let us take two scenarios and compare the monthly interest rates that you would pay under each of the two scenarios. In the first one, let us assume that you borrowed a loan of £10,000 for a period of 3 years at 10 percent interest per annum. So, the total interest payable for 3 years is £3,000 and the monthly interest is £83.33. In the second scenario, let us assume that you borrow another loan of £10,000 for a period of 5 years at 8 percent interest per annum. So, the total interest payable for 5 years is £4,000 and the monthly interest is £66.66.
So, in the first scenario, the total interest rate is lower, which makes it ideal if your goal is securing a loan at the best interest rate. However, since the duration of the loan is shorter, your monthly payments would spike up, so you need to make the decision based on your affordability. In the second scenario, although the interest rate is lower, you end up paying a higher amount of total interest because your borrowing period is longer. However, if you have certain other debts or financial commitments then this option may still work because it helps keep your monthly payments low. Therefore, the duration of the loan depends on how much money you can dedicate to monthly payments.
Yes, one of Money Pig’s goal is to provide you with the necessary assistance to secure a loan at the best rate, and we achieve this by letting you gain access to many licensed direct lenders through a single platform. So, when you apply to Money Pig, you continue to get proposals from several direct lenders, which puts you in the driver’s seat. So, you are absolutely in control of your finances and can choose the most profitable proposal from our wide network of direct lenders who follow a certain lending pattern that we have laid out. This includes offering loan assistance to those with all types of employment and credit scores. So, regardless of your background, Money Pig can help you secure a loan at the best rates.
Your credit score not only influences your chances of securing a loan at the best rates but can wipe it off entirely. Premier banks and financing institutions only transact with those who have a good credit score, and if you don’t then your loan application could be rejected. Every loan rejection would only add to your troubles as most mainstream banks and financing institutions run hard credit checks while screening loan applications.
At Money Pig, your credit score may affect your interest rates, but not as much as it does in the case of premier banks. We must admit that like all lenders in the UK, most of our partner direct lenders also offer lower interest rates to those with a good credit score. However, we do not reject loan applications from those who have an average or poor credit score. Such individuals may apply for bad credit loans and may still be able to secure a loan at the best rate by furnishing guarantors with good credit history. We do our best to minimize the impact that bad credit score can have on the interest rates that you are offered.
When it comes to securing a loan at the best rate, Money Pig is a friend that you can rely on. As a responsible financial intermediary, we do everything possible to help you plan and structure your finances in the most effective manner. From roping in the most principled direct lenders to handpicking the most profitable deals — Money Pig leaves no stone unturned when it comes to helping you secure a low-interest loan.
As you set out to explore your borrowing options, you must know that the UK is currently infested with loan sharks. These are unlicensed, illegal lenders who charge very high-interest rates and follow unregulated debt collection methods. However, you can be sure that the lenders whom we connect you with are regulated by the Financial Conduct Authority (FCA). As these lenders are bound by the restrictions imposed by the FCA, they need to follow certain procedures when it comes to setting interest rates, collecting debts, and performing other intricate formalities.
Currently, over three hundred thousand individuals owe money to loan sharks, with millions of pounds in illegal debt. Therefore, to protect you and to help you secure a loan at the best rate, Money Pig partners-up only with highly ethical and reputed direct lenders who hold the necessary licenses. With such stringent measures in place, Money Pig not only helps in securing a loan at the best rate, but also safeguards you from the loan sharks.
Personal loans are the most sought-after unsecured loans, mainly due to the lack of restrictions on how the funds are used. With a few exceptions, most personal loans are designed to allow the borrower to use the loan amount at his or her own discretion. Due to its high demand and flexibility, this type of loan usually comes with high APRs. While you cannot do much when you are dealing with an exigency, you definitely wouldn’t want to skip negotiating while borrowing one to consolidate your debts.
So, while borrowing a personal loan and evaluating the interest rates, it is essential to take into account the purpose of your borrowing. You then need to structure this loan accordingly to minimize the total APR that you would be paying. You can do this by requesting quotes from several lenders and comparing them based on total interest payable. Also, borrowing a loan for the shortest duration would help minimize the total interest payable on that loan.
Another important point to note is that you must always try to choose personal loans that offer fixed interest, which is locked for the entire loan period. This type of interest rate does not change as in the case of variable interest rates. Also, enquire about the origination fee or any other set-up costs that you may have to pay. These costs are sometimes included in the APRs and sometimes excluded, so confirm the associated fees from the concerned lender. Most banks and financial institutions charge between 1 percent to 6 percent of the loan amount as set-up charges.
Once you identify the car you wish to buy, the next big challenge is securing a loan at the best rate, which can be a complex decision. That’s mainly because if you focus on securing a loan at the best rate, you may have to bear the depreciation. We say this because the cheapest way to buy a car is through a car loan, which costs less in interest but does not give you the car’s ownership until you have repaid the full loan amount to the lender. During that period, the interest that you save and more would be lost in the form of asset depreciation as cars tend to depreciate much faster.
Therefore, most borrowers choose to apply for a personal loan and use it to buy a car. Despite the higher rates that are attached to personal loans, these work better because you get to own the car right from the beginning and sell it before it fully depreciates. If that seems to be the right thing to do, then we have some good news for you. Money Pig’s direct lenders offer low-interest short term unsecured loans such as student loans and personal loans that can be used to buy a car of your choice.
Our direct lenders are flexible and offer favorable prepayment clauses that you can use to repay the loan early and lower the overall interest rates that you pay. We provide this option because we understand that it’s not always possible for you to borrow a loan for a shorter duration. Doing that spikes up the monthly payments, which may not be ideal for salaried persons.
Maintaining a good credit score in the UK is extremely difficult unless you are completely educated and informed about the intricacies of credit checks. For most people, it’s a mystery that they cannot solve and a fact that they uncover only when they try securing a loan at the best interest rate. Often, it is the potential direct lender who informs the borrower about his bad credit history. This is often a result of delayed repayments or missed repayments on your part. Also, other factors such as loan rejection, check bounce, bankruptcy, etc… negatively impact your credit score.
Banks usually refuse to transact with those who have low credit scores even if they have held an account with that bank for years. This loan rejection by the bank further lowers your credit score and creates more hurdles for you. On the other hand, the UK’s financial services sector is full of unlicensed loan sharks eager to trick you into an illegal and expensive deal. To protect you from both scenarios, Money Pig offers a platform for potential borrowers to connect with several FCA-licensed direct lenders. Our direct lenders offer several unsecured loan options such as bad credit loans, and loans to consolidate debts that can be of use to those having a bad credit history.
If you are concerned about your poor credit score and wish to improve it for a better financial future, then we are here to help you. Before we tell you how you can improve your credit score and secure a loan at the best rates, you need to understand credit scores and how they work.
Credit scores are calculated and maintained by the credit agencies based on your financial data. This score helps preserve the integrity of the financial services industry and is an indicator of your debt behavior. Some factors that are usually responsible for low credit scores include late repayments, defaults, multiple loan applications, and certain other factors.
Therefore, to improve your credit score, you need to change your debt behavior and borrow only as much as you can afford to return in a prompt manner. Also, avoid applying to multiple banks and lenders at once because most of them perform hard credit checks. This gets recorded as a hard search in your credit history, and any rejection of the loan application can further lower your credit score. To avoid delay in repayments, we recommend that you set up direct debits. This ensures that the payments are automatically made on time and eliminates the possibility of a delay.
Other tips to improve credit score includes borrowing at least twenty percent lesser than your maximum borrowing limit. The lesser you borrow, the better it is for your credit rankings. Also, prepayment of loans and reduction in overall debts can help improve your credit score. We also recommend that you consider updating your current address on the electoral register if you haven’t already done that. Do not be carried away by the myth that the previous occupant’s bad credit history or insolvency would hurt your credit score. Avoid letting such myths hold you back from updating your current address on the electoral roll because it is only your financial behavior that can impact your credit score.
The process of comparing loans is much more detailed than calculating interest rates, which you probably learned at school. In the real world, unethical lenders complicate this simple calculation in order to trick you into paying higher interest rates, either directly or indirectly. So, the first step is to choose FCA licensed lenders, which minimizes the chances of being tricked and duped by an unethical and unregulated loan shark.
Next, you need to know all the costs associated with the loan and how those costs are calculated. Most lenders do not disclose a clear breakdown of these costs until you press them to do so. However, once you have a clear breakdown of the borrowing costs, you’ll be amazed at how expensive it is. Usually, lenders charge anywhere between one and six percent set-up fees on the entire loan amount that you intend to borrow. This is usually offered based on your credit score, however, don’t forget to negotiate these costs with the lender. You could always do so by offering collateral or guarantors even if your credit score isn’t up to the mark. Finally, there could be other loan processing costs involved, which you may have to bear.
Once you have negotiated the set-up fee, add in all the other costs such as loan-application fee, processing fee, etc… To this, add in the total interest payable, which gives you the aggregate borrowing costs. By comparing the quotes based on the aggregate borrowing costs, you can easily compare them and pick the most profitable deal.