As we have written about extensively in the past here on the CashCompare blog, there are various reasons why you might conceivably seek to take out a loan.
A true “emergency” situation might have come up, such as a need to pay unexpected veterinary bills, or the car that you use for your daily commute failing to start on a morning and requiring repairs. Or you may be yearning to carry out certain home improvements, or to indulge in the escapism of an overseas holiday.
But it’s one matter to get a loan, and it’s another matter to get the right loan. So, let’s take you through the essentials of ensuring the latter.
Firstly… Is Applying for a Loan the Right Choice for You?
This is, of course, a very big question in itself, and it is likely to hinge on a wide range of factors. Those include the specific reason you’re thinking about applying for a loan in the first place, as well as your credit score, and what your longer-term plans are.
Not everyone has the luxury of extending their overdraft slightly, taking out a credit card that allows for interest-free purchases for a certain period of time, or simply asking family or friends for help.
But of course, it is well worth thoroughly investigating such options – or others – before you commit to a loan. After all, even the lowest-risk loan still presents the reality that you will need to ensure timely repayments from the start to finish of the loan term.
While loans can provide necessary financial support, it's important to consider both the benefits and potential risks, such as increased debt and interest obligations.
So, What Steps Can You Take to Ensure You Get the Most Suitable Loan Deal?
The below measures could all go some way to ensuring you put in place a loan agreement that works for you:
Using a Credit Broker or Comparison Site: The fact is, one lender can only present you with whatever one lender can offer you. A credit broker such as CashCompare, on the other hand, can put forward multiple personalized loan quotes from across the market, not forcing you to put all your faith straight away in a single lender. CashCompare is authorized and regulated by the Financial Conduct Authority, ensuring compliance with the highest industry standards.
Only Borrowing the Bare Minimum: The smaller the loan that you take out, the lower the financial risk you will be exposing yourself to when taking out the loan. Short term loans can have very high interest rates, so if you can combine a loan with financial help from family and friends (for example), this will further help to reduce your risk.
Taking Account of Your Credit History: It’s free to check your credit rating online with the UK’s three main credit reference agencies – Experian, Equifax, and TransUnion. The credit scores that you are shown as a result of this process, might well greatly inform what decisions you make on seeking out a loan. Keep in mind that different lenders may interpret your credit score differently, affecting your loan terms and interest rates.
It Could Take Just Minutes to Determine Your Options for a Short-Term Loan
Something else that you might appreciate knowing: when you use our online loan request form here at CashCompare, you will not be under any obligation to accept whatever personalized loan quotes you are presented with from this process. So, this could be a great way to determine what your likely loan options are, considering the broader market rather than just one or two lenders.
As always here at CashCompare, we would urge you to take great care over whatever decision you make. This will enable you to be confident of having made the most financially responsible choice for your own circumstances and needs. At CashCompare, we adhere to responsible lending practices to ensure that our customers are matched with loan offers suitable for their financial circumstances.
"Warning: Late repayment can cause you serious money problems. Always consider if borrowing is the right option for you and ensure you can repay your loan." For help, go to moneyhelper.org.uk.