In the United Kingdom (UK), people are becoming more prone towards the extensive lifestyle and they can do anything to stand firmly to their social status. Well, it is everyone’s right and anyone should not interfere to other’s life. However, this blog is not on the human’s nature but definitely on the lending behaviour between the lender and the borrower. Many people apply for the loans and they get sufficient financial help during their tough situations. It may be their financial compulsions but in the end, they are getting benefits and it is enough for them.
The gap between large financial ambitions and restricted earning sources actually creates the need of loans. At the same time, the over dependent on the loans should not happen, but it is already doing in many cities of the UK. As a consequence, the lending firms have to bring out fresh loan products eventually with different lending terms and conditions. Here, we can see the clear difference between the approaches of those lenders where on the one hand, few are ready to modify their policies according to individual circumstances and on the other hand, few are providing the loans on high interest rates.
The issue of high interest rates has taken a severe form especially from the last few years. It is the reason why there have been so many restrictions on the payday loan lenders, who think high interest rates as their income generation source. Time demands that you should be an intelligent borrower, but the question comes, how you become an intelligent borrower?
To assist you a bit, we are framing some of the vital suggestions that can really guide you in preventing yourself from the high interest rates. These are:
Enhance Your Credit Score
Your first job is to raise your credit score by performing well in your payments for credit card bills, utility bills or the university fees, whatever. It certainly puts good impression on the lender and it might facilitate you with low interest rates. It has been found that most of the loan applications have been denied due to the bad credit scores of the borrowers. Nevertheless, some lenders are open to these people and ready to fund them through loans with bad credit, but again on high interest rates.
Be precise to your groundwork
The easy approval and guaranteed loan disbursal are common these days. It can be good for the borrowers or it should be, but simultaneously, borrowers can become careless to the lending procedures. They opt for a loan without going through the interest rates, repayment part or loan term, and later they regret to their decision. You should not do the same. Prepare your loan purpose and decide for how many months or years you need a loan because all these factors will influence the loan interest rates.
Better to opt for secured loan option
There is a common concept of getting the loans on low rates of interest is to choose secured funding option. Unsecured loans, where no collateral is required, often provided on the high interest rates and most of the time, they are applied on financial emergency. If you able to arrange money from other sources during any urgency, then it would be better for you to keep the loan decision only for long financial purposes and thus opt for secured loans.
Try to be friendly with lender as much as possible
If above explanations are belonged to the formal discussion, then this point certainly is more informal one. But it is indeed a valid point. There are a few direct lenders in the UK, who are flexible to their policies and can modify the terms according to the prevailing circumstances of the borrowers. The best example is when they offer no guarantor loans for unemployed people. You can choose them as your lender and discuss everything before e-signing the loan contract. Tell them your financial compulsions and on that basis, try to convince lenders on the affordable interest rates.
Interest rates are undoubtedly the most worried part (in the context of borrowers) and a beneficial part (in the context of lenders). Thus, walking every step carefully is intrinsic for your overall financial steadiness.