Taking out Cheap loans online in the UK
Fortunately for borrowers in the UK, there is a plethora of options readily available from traditional lenders like banks and online lenders as well if they want to access cheap loans. Before, banks, credit unions and other traditional financing institutions where the only avenues to obtain affordable credit products. This meant that you need to fall in long queues, set up appointments, do tons of paperwork, and more to make an application. You will then have to wait for a week or longer to wait for a response from your bank or credit union whether your application has been approved or not.
Today in the UK however, the internet has brought in a wide array of reputable private lenders that provide borrowers with competitively low interest rate loans that can be accessed with ease online. So what are these online loans anyway? Below we will show you all of them.
Cheap loans with a guarantor
Guarantor loans are one of the best ways to obtain a cheap loan especially if your qualifications are not that impressive. To enjoy affordable rates with the financial product, you will need to find someone who is willing to co-sign your loan application and agree to serve the role is a guarantor. This can be anyone you trust and share a special bond with like a friend or family member and will agree to become a secondary option in your loan’s repayments. This means that if you find it hard to keep up with your loan’s payments, your guarantor will step in and carry the burden.
An affordable alternative for not so qualified borrowers
Guarantor loans were designed for borrowers who have problems in taking out credit because of their lack of qualifications either because they have bad credit or have inadequate credit histories. This could mean that they had trouble in dealing with debt in the past resulting to a bad credit standings or have not accessed enough credit resulting in a none-existent or inadequate credit history.
If you manage to find someone who satisfies the lender’s “guarantor” criteria, it would be easy to apply for a cheap loan despite your credit status. The guarantor in your loan deal must typically be someone who is:
- A legal resident of the UK
- Aged 21 to 75 at the onset of your application
- Someone who has a strong credit rating
- A UK bank account holder
- Employed and enjoys a reliable source of income
- Not financially linked to you like your spouse
While the lender will still evaluate your eligibility, your credit standing won’t matter much but that of your guarantor will. You will also need to demonstrate affordability on the loan and its repayments. If you and your guarantor meets the lender’s criteria, you can take out a cheap loan anywhere from £500 up to £15,000. The better you and your lender’s qualifications are, the larger the amount and the better the interest rates and payment terms will be. Normally, the representative rate of this type of loan can fall to 39.9% APR.
Cheap loans for Bad Credit
But guarantor loans are not the only options that you can look into if you want to access cheap loans and you have bad credit. There are also other financial products that are readily available in the UK that can help you enjoy affordable rates if you have an imperfect credit rating and don’t have someone that can serve as a guarantor in your loan deal. They include:
If you need to obtain an affordable loan and you have your own vehicle that you can comfortably offer as collateral, logbook loans are options that you can consider. With the loan product, you can take out a loan for as little as £250 and as much £150,000 depending on the lender. Normally, you can borrow 50% of your vehicle’s trade in value although there are lenders who allow you to borrow as much as 75%. You can quickly payback your loan after six months or as long as five years depending on your affordability. The Representative APR rates for the loans normally hover around 80% APR although you can find lower rates with the right lender.
Door Step Loans
If affordability and convenience are two things that you want in your loan, then doorsteps loans are options worth looking at. The loans are offered in small amounts with short payment periods and, as it names suggests, the money you requested for will be delivered right at your doorsteps by a friendly local agent representing your lender. While the rates for doorsteps loans are mostly higher than the other bad credit loan options, the ease and convenience it offers allows you to save plenty of money. This is because the transfer of funds and the collection of payments will be completed right at your home, saving you precious time and money in return.
Personal Loans for bad credit
If you don’t have a guarantor to back you up or a vehicle that you can comfortably offer as collateral to access better rates, personal loans are the ideal options for you. The financial products can help you borrow as much as £25,000 from a reputable lender and pay it back in a year or longer depending on your agreement. Aside from providing you with amazingly low interest rates that fall in the single digits, there are also some advantages that you can enjoy with personal loans such as:
- Borrow high amounts of loans that are larger than credit cards
- Fixed monthly payments that are ideal to your budget
- Flexibly payment terms that can be tailored to your needs and present circumstances
- Can be used for any legal purpose such as consolidating debts, purchasing a certain item, or taking a vacation
Joint loans work like guarantor loans in the way that there is another person who will enter into a loan agreement with you. Your co-borrower however, will have to share equal responsibility in paying off the loan and also has equal rights in using the loan. With the joint loans, you can enjoy low interest rates that are more affordable than the bad credit loan options mentioned earlier and also allow you to enjoy distinct advantages such as:
- Comfortable repayments. Because there are two people who share equal responsibility in the loan’s repayment, paying off the entire debt would be more comfortable in your part.
- Easier to qualify. If your co-borrower has a stellar credit rating and a strong income level, it would be easier for you to qualify as both you and your co-borrowers qualifications will be considered by the lender.
- Larger amounts. Because its simply less risky in the part of the lender when two people are involved in a single loan, it makes it easier for them to grant not only the lowest rate but also the largest amounts that they can lend. Normally, joint loans are the ideal loan options for people who are looking to make an major purchase such as a house or new vehicle.
How to get cheap loans with no guarantor
If you are considering taking out a loan in the UK today, then you’re currently in the perfect time to do it. The loan industry has become increasingly competitive due to the growing number of lenders that have entered the market making it easier to get cheap loans without a guarantor. And if you consider the fact that there are now online lenders that can offer you competitive loan rates, getting an affordable rate is now even more convenient. So you can enjoy cheap loans online without the need of a guarantor, below are some of the things that you might want to bear in mind.
- Borrow only what you can afford. The first thing that you need to consider to get the lowest rates for you loan is to apply for an amount that you can genuinely afford. The amount should be reasonable amount and ideal to your budget. This will make it easy for your lender to approve your application and grant you the best rates and terms as well if they can see that it is something that you can genuinely afford.
- Decide how long you will need to pay it back. Payment terms for cheap loans can vary depending on the type of loan and your eligibility. Home loans for instance, allow you to obtain large amounts for long periods that can last for 25 years. Doorstep loans on the other hand, provide small amounts for short durations that last for a few months. Remember however, that borrowing longer can be more costly in the end because it means you will have to cover numerous interest rate payments.
Know the available options
If you have already determined the amount that is comfortable to your budget and the payment period that works best for you, the next step would be to indentify the loan options that provide the most affordable rates. Normally, the cheapest loans are those that are:
- Personal Loans
- Secured loans
- Joint loans
These three no guarantor loans provide the lowest interest rates that generally fall below 5% depending on the lender and your qualifications.
Cheap loans from a direct lender
Whether you intend to take out a cheap guarantor loan, no guarantor loan, or bad credit loan, one of the best ways to go about it is through a direct lender. With a direct lender, you will avoid dealing with numerous companies at once making it a lot easier and quicker to obtain the loan that you need. But with the abundance of options that you can find online, choosing the ideal direct lender can be quite overwhelming. To simply your search, use these easy steps:
- Do your homework – Research online and look for lenders that provide competitive rates for their loan products. Relying on a comparison site could help hasten your search and so does relying on word of mouth from friends, family members or someone who has had experience in taking out a low interest rate loan. You can also visit forums and review sites to give you the information that you need in pinpointing the right direct lenders that provide cheap loans.
- Limit your search based on your loan option – Focus your search on direct lenders that provide the kind of loan option that is ideal to your needs and present circumstances. If you have bad credit for example, then you should only look for lenders that provide bad credit loans. After that, find those lenders that provide the most competitive rates for the kind of loan option that you need.
- Watch out for fees – Sometimes, two lenders can have identical interest rates for the same loan product but the overall cost you will incur will vary because of the fees that they attached to it. This is why you need to know firsthand if there are fees involved in a specific loan product before you apply. And if there are, you need to know what they are how expensive they can be.
You can also use these tips to help you enjoy the cheapest loans from direct lenders:
- Do not immediately accept the first offer that the lender will give you. You can ask your lender for a better rate and the things you can do to avail the best one that they can provide. Negotiating is key to enjoying the cheapest loan that you can get from a lender.
- Credit rating is one of the most important factors that will determine your interest rate for a loan. Often times, the best rates are reserved for borrowers who have excellent credit scores. With that being said, try your very best to keep your credit rating in good standings by paying your bills and debts on time. You might also want to get a copy of your credit report to see if there are errors and inaccuracies that might have lowered your score.
- Ask for a quote from the lender before you start an application. If the lender conducts a credit reference check, request for a quotation search (which will not affect your credit record) rather than an application search (which will).
- Finally, ensure that the direct lender is legit and reputable to avoid incurring hefty rates and hidden fees and charges. This can be especially important when you take out a bad credit loan where exorbitant APR’s are common from loan sharks and the like.
Cheap loans in the UK and Cheap loans with instant financing
Among the cheap loans available in the UK today, those that provide instant funding are the most popular. Normally though, these kinds of loans are offered in small amounts since they are designed to deal with emergency situations. They also have short payment periods that can last for just a few months. But you can still take out larger loans with longer repayment terms like personal loans with quick funding from specialist lenders if you know where to look. Some of the features of these types of financial products include:
- Quick and seamless online applications. There is no need to fall in long queues, fax documents, or do any kind of paperwork whatsoever. All you need to do is to fill out an application form in a lender’s website that can take just several minutes to accomplish and simply click the submit button once your done.
- Instant approvals. These are unlike traditional loans from banks that can take forever before you receive and approval response. For larger loans like joint loans, guarantor loans and personal loans, you can get an approval after 2-3 days depending on your lender. For short-term loans like doorstep loans, you will normally receive an approval in the same day you submitted your application.
- Instant Payouts. Once your application becomes approved, it won’t take long for lenders to deposit the money that you requested for to your account. Same day funding is quite common for these kinds of financial products and lenders can even transfer the loan to your bank a few hours after your application was approved.
Qualifying for Cheap loans with instant funding
Before you apply for cheap loans in the UK that offer instant funding however, be sure that you know what the essential qualifications are so you will know whether your are eligible in taking out the financial products. This will help you avoid wasting time on applying for a loan that would only get your rejected in the end. It will also protect your credit rating from being tarnished as numerous failed applications can leave a mark on your credit report.
Normally, the basic qualifications for cheap loans with instant funding include:
- Be at least 18 years of age and a resident of the UK
- Possess an income that meets the lender’s criteria e.g. £8,000 per year
- Must have a strong credit score and positive credit history (for personal loans)
It’s important to note that qualifications may differ slightly from lender to lender and also on the type of loan that you want to take out that’s why it’s important that you check them all first before you make an application.