Which Type of Loan is Right for Me?
Before borrowing a loan, you need to know two things — how much to borrow and for how long you wish to borrow that amount. The answer to these two questions is based on your individual needs and it is always recommended that you borrow only as much as you need, since loans come with borrowing costs. Once you are through with that, the next question that crosses your mind is the obvious one — Which type of loan is right for me — and there are many ways to look at it.
Depending on your income, type of employment, individual needs, personal circumstances, and certain other factors, you need to choose the right borrowing option. At Money Pig, we have a wide network of lenders that offer all types of loans. Nevertheless, depending on the factors mentioned above, some of these could turn out to be more profitable than others. We offer this wide range of options to cater to the diverse needs of our customers. However, we understand that this could make things a wee bit confusing and therefore here’s all the guidance you need to decide which type of loan should you borrow.
Which type of loan is right for me | FAQs
- What types of loans are available with Money Pig?
- I am a student unable to pay my bills. Which type of loan is right for me?
- I want to buy a car. Which type of loan is right for me?
- I am between jobs. Which type of loan is right for me?
- I owe multiple debts. Which type of loan is right for me?
- Which type of loan is right for me if my credit score is low?
- Which type of loan is right for part-time employees?
- I am on universal credit. Which type of loan is right for me?
- I want to keep my monthly payments low. Which type of loan is right for me?
- Which types of loans charge lower interest rates and why?
- How do I compare loans to know which type of loan is right for me?
- I want to go on vacation. Which type of loan is right for me?
Money Pig offers all types of loans, which can be broadly classified into long-term loans, short-term loans, secured loans, and unsecured loans. Long term loans are usually granted to those who wish to borrow larger amounts and come with a longer repayment period of over five years. On the other hand, short term loans come with a repayment period of up to five years and are ideal to address short term needs. Some of our popular short-term loans include bad credit loans, student loans, cash advances, etc…
Loans can also be classified on the basis of whether or not you need to furnish security or a guarantor. If you need to do that then it is called a secured loan, otherwise, it is referred to as an unsecured loan. Some of our popular unsecured loans are payday loans, personal loans, student loans, same-day loans, etc… As you can see, our offerings are designed to cater to those coming from all walks of life. So, regardless of your credit score or ability to furnish security, we definitely have something designed for your needs. If you are not sure of which type of loan you wish to borrow, then simply make a mention of it in the loan application that you submit to us and our Experts will get back to you with the most profitable option.
If you are planning to borrow a loan to buy a car then you have several financing options that you can choose from. You can choose to purchase a car on hire purchase or through a car loan. However, in both cases, you would own the car only when you repay the last payment to the company or the lender. This causes a major roadblock when it comes to selling your car because you don’t own it until you make all the payments. So, you can’t sell your car even if you are in sudden need or money or are offered a good price by someone for your car.
This issue can be overcome by buying a car with your savings, which may not be financially feasible. So, the easiest way out is to borrow a personal loan to buy a car. Doing this would make you the owner of the car right from the start. So, you can sell your car whenever you wish to and then use those funds to buy another car that you always wanted but couldn’t get your hands on. The pre-owned car market in the UK is dynamic and if you are someone who likes to keep changing cars then you are not alone. Also, there are many people who choose to sell a car early to get a fair price before the car further depreciates. So, if that sounds like you, then consider buying a car with a personal loan. Money Pig’s lenders offer personal loans with attractive interest rates.
If you are a student worried about which type of loan is right for you, then that’s nothing new. We earlier received inquiries from thousands of students who wished to borrow a loan for personal use. Most of them needed a short-term borrowing to meet their personal needs but did not qualify for any loan from their bank except for the small overdraft. The reason was always a lack of full-time employment because that is impossible for those pursuing full-time education. Therefore, Money Pig worked out an arrangement with its network of lenders and now offers student loans, which are more like personal loans granted to students. Those pursuing full-time education and struggling to pay their bills can make use of this facility offered by Money Pig.
If you are in dire need of money, then make it a point to highlight that in your loan application and we will make it a point to process it within a few hours. However, to qualify for a student loan you must be a UK citizen who has completed 18 years of age and is capable of entering into a legally binding contract. If you have a part-time or a remote job, then you can mention that in your loan application, and we will consider it while processing your loan application. Please note that you do not have to pay any fee to us during the loan application or for the processing of your loan. Our services are absolutely free to loan applicants, so go ahead and submit an online loan application on our website.
When faced with financial adversities, people often tend to make the wrong decisions such as borrowing multiple small debts at high-interest rates. If you have been through a similar situation then you must consider rectifying this mistake before its too late. Money Pig helps you do that by offering loans to consolidate debts at relatively lower interest rates. Depending on the amount you wish to borrow, this could be a secured or unsecured loan that you can use to settle your previous high-interest borrowings.
Borrowing such a loan from Money Pig comes with three key advantages. First off, you do not miss out on repaying the loan due to the multiplicity of repayments. That’s because when you consolidate your debts into a single loan, you are bound to repay it only to a single lender. This minimizes the possibility of missing out on repayment which could lower your credit score.
The second key benefit is lower and standardized interest rates. When you apply for a loan to consolidate debts from Money Pig, you will notice that most of our lenders offer fixed interest rates that are lower. Finally, Money Pig’s lenders offer flexible repayment period which can help lower your monthly repayments. So, when you borrow such a loan from us, you can work out a longer repayment period with the lender and reduce your monthly repayments.
At times, your credit score may drop for no particular reason and you may realize this only when you apply for a loan and the bank performs a hard credit check, only to deliver the bad news to you. Most leading banks in the UK do not advance credit to individuals with a low credit score. So, if you are in that tight spot then there’s no point in approaching other banks. In fact, every time you do that you risk another loan rejection which may further lower your credit score.
This is when Money Pig can help because we are a financial intermediary and not an individual direct lender like the banks. As we are tied up with multiple direct lenders who have varying risk appetites, we can always find you someone willing to advance a loan despite your low credit scores. In fact, to offer loans to those with low credits, we have a special category of loans designed. These are referred to as bad credit loans and are an ideal choice for those with low credit scores. It is worth mentioning that all our lenders are licensed by the Financial Conduct Authority (FCA) and are legitimate lenders. However, this may not be the case with some lenders. With so many loan sharks out there, you need to be careful about who you are transacting with.
If you are currently unemployed in the UK, then you must seek benefits or borrow a loan depending on whether you have a job offer or not. In case you are unemployed with no current job offers then we advise you to apply for the appropriate benefit such as universal credit or other benefits such as income-based jobseeker’s allowance. In case you do not qualify for these benefits or need money urgently then you can apply for one of the many short-term loans that we offer. A few to mention are personal loans, cash advances, fast loans, etc… However, you may have to furnish a guarantor depending on the amount you wish to borrow and your current financial condition.
If you are already on universal credit then the best option is to apply for a budgeting advance, which means you are requesting to borrow some of your universal credit in advance. However, there are some downsides to doing this such as the approval process and the time involved in the approval of the budgeting advance. Also, in most cases, the authorities do not sanction the entire budgeting advance amount that you ask for. So, if you are in a hurry and need money urgently then consider applying for a loan with Money Pig. As we do not charge our applicants for the loan application and processing, you need not worry about that. Put in your loan application to us and we will tell you which type of loan is right for you. In such cases, you would most likely be asked to furnish a guarantor for the loan amount. However, there are also some lenders that may be willing to advance the loan without asking for guarantors.
Times have changed and so has the type of employment opportunities that are available in the job market. To keep up with these changing times, we offer all types of short term loans regardless of the type of employment you are in. Now, this isn’t something that your regular bank or lender would offer because most of them advance loans only to those with full-time jobs. That is not the case when you apply to Money Pig because we have a wide network of lenders who agree with our philosophy. Together we believe that those in part-time jobs and remote jobs are equally competent to repay a loan. So, if you do not have full-time employment, you can still apply for our short-term loans such as personal loans, student loans, cash advance, fast loans, etc…
Those with limited monthly income may want to keep their monthly repayments low, which makes sense because they also need to fulfill other financial obligations. So, if you wish to lower your monthly payments then we have loans designed to help you do that. If you have already borrowed a loan and your monthly repayments are high, then you can borrow a loan to consolidate that debt from one of our lenders.
On the other hand, if you plan to borrow a loan now, then make it a point to borrow the loan for a longer duration, which would bring down your monthly repayments. For instance, if you have borrowed a loan of £20,000 at 20% APR for three years, then your monthly repayment would be £743. However, if you borrowed the same amount, which is £20,000 at 20% APR for five years, then your monthly repayment would reduce to £530 per month. Long term borrowings keep your monthly payments low as the loan amount is spread over a longer duration.
Usually, long term loans and secured loans charge lower interest rates. Long-term loans charge lower interest rates because the lender earns interest for a longer duration. So, the overall lending fee that the lender collects from you in the form of APR is higher, even if the interest rates are kept low. For instance, if you borrow a loan of £5,000 for one year at 30% APR then you would be repaying a total of £6,500. However, if you borrow a loan of £5,000 for three years at 20% APR, then you would repay a total of £8000, which means that the lender earns more. However, you still benefit in the form of reduced monthly payments. In the case of secured loans, there’s lesser risk and therefore lenders offer lower interest rates. This is usually because you would have provided some sort of an asset as security, which the lender can forfeit in case of non-repayment.
Due to a lack of financial awareness, most people tend to compare loans based on interest rates, which is the most erroneous loan comparison method. As a matter of fact, interest rates are just one of the many borrowing costs that you incur while borrowing a loan. Most people are unaware that they end up paying up to seven percent or more of the loan amount as set-up costs. These costs are usually included in the APRs along with interest rates and certain other borrowing costs. Therefore, you must compare loans based on APRs, which again varies based on the duration for which you wish to borrow a loan. Usually, loans borrowed for a shorter period of time come with higher APRs while those borrowed for a longer duration charge lesser.
Besides APRs, you also need to compare the commercial clauses such as repayment clauses, delayed payment clauses, and prepayment clauses. Always try to negotiate at least three late payments per year with the lender and have that mentioned in the loan agreement. Also, check if a penalty would be charged for early repayment of the entire loan amount, which is undesirable. These clauses may not have a direct impact on the amount you borrow or repay but would help during adverse situations. So, if you lose your job, then the delayed payment clauses would give you sufficient time to arrange funds. Likewise, if you can afford to repay early due to a raise or bonus that you receive, then you could do that without having to pay a penalty for it. Most lenders charge penalties on prepayments to make up for the loss of APRs. However, when you borrow a loan from Money Pig, you would have ample time to negotiate these clauses with the lender before entering into a loan agreement.
Usually, it is not advisable that you pick a loan for recreational purposes such as going on a holiday because the borrowing costs would only make your vacation more expensive. Instead, you must consider borrowing money from a friend or relative as then you wouldn’t have to bear the borrowing costs. If that is not possible then you could borrow a personal loan, which is an unsecured loan without any restrictions on how you spend the funds. A similar option is available in the form of student loans to those pursuing full-time education These loans can be used by the student for personal purposes and many of our applicants choose to borrow it to buy a car, go on a vacation, or to upgrade their lifestyle. However, regardless of whether you qualify for a payday loan, avoid using it for recreational purposes as it comes with high-interest rates.
Making financial decisions such as borrowing a loan can be difficult for some people and we completely understand that. So, if you are still wondering which type of loan is right for you, then get in touch with one of our Experts. Our professionals would try to figure out your needs and recommend which type of loan you must apply for. For the most profitable loan option, Apply Now.