Not everyone has infinite amounts of money, but everyone could easily spend all the money that was given to them. For people that have some unforeseen expenses that come around when they least could afford them, there is a way out of that painful situation by taking out a loan. The only question is what are the exact steps that one should take before they take out a loan. While the very bank has some of the small details changed to fit their policy best, its universal across all banks and all countries that most of the loans that banks give are given in the same way. If you are located in the UK and you want to take out a loan we have some steps that you should follow so that you can take out a loan, and we will now list them below.
The credit score
If you want to take out a loan you have to have a credit score that is not in the red. What that means is that if you are owning money for some reason or late in payments you will have a bad credit score. But, if you have a good credit score by paying everything on time and keeping a tidy account, you can actually build up a good score. Having a good score will boost your chances of getting a loan by a significant amount, so make sure to check out your credit score.
If you are serious about getting a big personal loan, you might want to check out your status by getting a pre-qualifying loan. This is basically taking out a small loan by the money lenders as they will perform a background check that won’t affect your score. Here you will need tons of personal information so make sure everything is in order before you do.
Have more choices than one
When you want to take out a loan you might be eligible for one place for a certain amount, but you could also be eligible for a bigger amount at another. Make sure to have more than one available option as this will help you get a better deal overall.
Check out all the options
Taking out a loan will have an impact on your credit score, but if you have a good credit score before you take out the loan you can get better deals in certain situations. For example, if you have a good score you could get yourself a 0-interest credit card loan. On the other hand, if you have a bad credit score and you want a loan that is way above what you would get without any collateral, then you might be interested in the secured loan plans, where you need to put out collateral for your loan but you will be able to take out a much bigger loan.
Read all the details
Every loan has many big words and if you just skin threw them you might be lost at a certain point. Read the fine print and make sure you understand it all.
When you have decided where you want to take out your loan, and what kind of loan you want it’s time to prepare all the things you need. Have some identification like a passport or a state ID. Next, you will need a verified address where they will find you and mail you certain news. For this, a utility bill on your name will be enough, or if you rent the copy of the lease will be a good enough document. Last but not least you will need proof of income and that comes in W-2 forms, bank statements from your payday, pay stubs, and even tax returns.
Taking out a loan today is much easier than it was in the past. However, today there are way more types of loans that people are aware and most of them have different uses and different fine prints that people should be aware of before they take out a loan.
Additionally, before you take out a loan you must be aware of your credit score as you may not be eligible for a certain loan that you want, but you might get a different kind of loan made available to you. To know which loans are the best for your situation you must be informed about all the choices that the loan industry has and with us, you will know exactly what kinds of loans exist and which ones are the best for you. The main category of loans can be divided into two types of loans the secure loans and the unsecured loans.
As the name implies the secure loans are tied down to something secure that is either a rule or with materialistic value like a house or a car. The unsecured loans are the loans where you just take out a certain amount of money without any collateral or any specific rules, besides the one where you have to pay it back at a certain time. This can further be divided into two more types that are the open and close-ended loans, the fixed rate loans or the variable rate loans.
The open-ended loans
Are loans where you are approved a certain amount where the credit limit is your ceiling. For instance, this is the type of loan that works on your credit card. Here you spend money until you reach your limit and then once you pay it off you can again spend the amount that you have on the credit card.
The Closed-ended loans
Are loans that you take out once and have a fixed schedule to pay it back. Once the amount is paid back you are done with the loan and if you need more money again you have to go and apply for a new loan again. These loans can be loans for the mortgage, student loans, installment loans et. This type of loan is smart if you know exactly how much money you need and how much your monthly payments can be so you can pay it back without worry.
Are all loans that have a fixed amount of monthly payments that will stay the same no matter the length of the loan. So, if you take a loan with a fixed rate your monthly payment will be the same even if you take a loan for one year or for 5 years. The negative side of this loan is that you can’t take advantages of certain loans that have a lower rate for certain situations.
Are loans that can be taken out with a fixed rate for the first year but will after that fluctuate between a lower amount or a higher amount. The good sides are that you can end up paying a lower interest rate, but the bad side is that you can also end up paying more in some situations.
Should you take out Payday Loans? As with other kinds of loans, there are pros and cons. It’s important to know some of the possible drawbacks so you can take steps to prevent them. Here are some of the main ones:
If you want to take out one of these loans, then you’ll typically be required to have a bank account. There are various reasons, but mainly it’s about making sure you’ve met the requirements to open an account. This increases the chance that you have a steady source of income and will be able to pay back the loan when you get your next paycheck. This is a critical issue because it helps to boost your chance of being approved for the loan if you have a bank account.
These can be quite high in the case of Payday Loans, and they’re often higher than for other types of loans. So it’s important to shop around. If you take that step, then you’ll be more likely to find a lender that’s offering lower fees or interest rates. That, in turn, can help to lower the total cost of taking out the loan. It’s likely a situation you’ll want since the added costs of fees and interest can add up quickly.
It’s unfortunate, but a provider of pay-day loans is sometimes an illegitimate lender. This puts the borrowers at risk since they might be charged sky-high interest rates or could be providing their personal/financial info to unethical people. It’s important to research a lender thoroughly to make sure they’re legit.
The amount of money lent through Pay-Day loans differs and is based on your salary and the lenders’ limits. However, the amount that’s lent out tends to be small. So if you’re hoping to buy a new house or car, you should consider a different type of loan to secure the money you need.
Payday Loans are for a short-term and usually a relatively small amount of money. This could be a problem if you need a large amount of money or for several months, for example. In that situation, you should probably consider other ways to borrow money. However, if you need a small amount of money for a short-term, then this type of loan is probably a good option for you.
You must have a full-time job to take out a pay-day loan. So this could be a problem if you’re working part-time, for example. This might seem unfair, but the main reason is to make sure the lender has a good chance of getting their loans repaid quickly. You might be surprised, but lenders want borrowers to repay their loans as soon as possible so they can get their money back quickly. That’s going to be more likely if the borrower has a full-time job. BadCreditSite.co.uk, however, are known to be able to help individuals looking for payday loans regardless of past credit or current employment.
These are some of the possible drawbacks of Payday Loans. Keep in mind it’s possible to avoid them by doing your homework and making wise choices.
Do you need some emergency money? If so then you should consider Payday Loans. Before deciding if they’re the best option for you make sure to know some of the main facts about them including the following:
1. It’s a small, short-term loan
Payday Loans are small loans that are usually paid back in two weeks when the borrower gets their next paycheck. They differ from many other traditional loans since there’s no collateral involved and the application process is very basic.
One key fact to keep in mind is that interest is charged. In fact, the rate is sometimes quite high since there’s no collateral required. However, when the lender needs the money for certain emergencies, it’s certainly worth paying the interest if it means they can get the money quickly.
2. It can put people in long-term debt
This is ironic since the payday loan is itself a short-term loan that’s meant to be paid back in two weeks. However, it’s important to note that rolling over payday loans makes up 75% of all volume of pay-day loans. It can cause a lot of long-term loan and often does. In fact, on average a pay-day borrower stays in debt for over 210 days per year.
In other words, standard payday borrowers are in debt almost 60% of the year because of their loans. So while the debt itself is often paid on payday, rolling over the current loans every two weeks can result in loans that last for about seven months of the year. It’s ironic since the loan is in theory for two weeks.
3. It’s become a booming business since the 1990s
In fact, pay-day loans generate $27 billion in yearly loan volume, which is quite a high figure in the world of finance. Another interesting fact is there are over two payday loan shops for every Starbucks coffee shop. This shows the fact that it’s become a very popular type of loan due in part to the wide availability.
4. It can include sky-high yearly interest rates
The interest rate for the two-week period is somewhat high compared to long-term loans. Is it worth it? If you need quick money for an emergency, then you’ll likely be willing to pay a 15% interest rate on loan, for example.
However, if you’re unable to pay the loan back you should be aware the annual interest rate for a payday loan can be as high as about 400%, for example. So if you’re going to take out one of these loans, you should certainly try to repay it as quickly as possible so you can avoid sky-high interest rates. This will help to reduce the total cost of the loan.
5. It often includes several loans per year
Here’s an interesting fact. 90% of pay-day loans involve borrowers who take out 5+ of the loans per year. So when people take out pay-day loans, it’s often a type of loan that they often pick for whatever reason. They could include the loan’s convenience or other issues.
Are you looking for a loan? If so then you should consider Payday Loans. They’re small, short-term loans that are easy to apply for, quickly approved, and usually paid out within a day or so. Here are some helpful tips for taking out these loans:
1. Shop around for interest rates
As when taking out other types of loans it’s important to shop around for the best interest rates. The rates tend to be somewhat high since the loans are easy to apply for and are paid out quickly. However, there’s the key fact that there’s no collateral required. As a result, lenders want some “insurance” to replace the collateral and that’s usually in the form of high-interest rates.
2. Repay your loan when you get paid
The main concept of a payday loan is that you’ll repay the loan as soon as you get your paycheck. You might want to rollover the loan so you can get another loan as soon as you repay your old one. There are times when you have to take this action because you have multiple emergencies.
However, keep in mind that rolling over a loan is different from not paying it in full within two weeks. Keep in mind that the interest rate I usually quite high for Payday Loans compared to other loans. However, if you don’t repay the loan within a few weeks, the monthly and yearly costs can be sky-high with annual interest rates as high as 400% or so. If you must take out a short-term loan before your next payday just makes sure you repay it when you get your paycheck.
3. Borrow what you can repay
This is one of the most important tips to consider if you’re looking for a pay-day loan. Make sure that you only borrow an amount of money that you’ll be able to repay. In fact, make sure that you can repay it on your next payday.
If you have an emergency financial situation, you certainly want to have the funds you need to cover medical costs, pay water/electric bills, and so on. However, make sure you don’t borrow more than you can repay since could cause a nightmare for you.
4. Ask for extensions for bills
If you have an outstanding bill, then you might be able to avoid taking out a loan by getting an extension for your bill. This isn’t always available, but some companies are willing to give you a grace period.
5. Consider all your options
Due to the high-interest rates of a pay-day loan, it’s a good idea to consider all your options before you decide on it. They include personal loans from a friend or relative. These are a great option because you’ll likely pay little or no interest. What’s important is to repay the loans as quickly as possible so your relationship with the person won’t be jeopardized.
There are other options to consider when you need emergency money. However, as always consider the pros and cons to make sure you’re picking the best option regarding getting funds for your emergency situation.
Are you looking for emergency money before your next paycheck? If so then you should consider Payday Loans. Here are some of the main benefits they provide:
When you need a small amount of money quickly, you probably don’t want to deal with a lot of hassles. That’s why this type of loan is a good option. You don’t have to keep contacting a lender or meet with a loan offer. There’s just a basic application process. That includes the form that you can send easily to the lender. You might have to provide some other info like proof of income, but it’s still much easier than applying for a traditional loan.
A key benefit of this type of loan is you get the money in cash. This is a plus over other types of loans that only let you make purchases using your credit card. Spending cash is much easier so you can make your car payment or pay a utility bill, for example.
A key benefit of Payday Loans is they’re often approved nearly instantly after you provide whatever info the lender requires. In fact, the application process for these short-term loans is very fast and simple. You don’t have to worry about completing long forms like many other loans.
There’s the amount of time the lender requires to wire the money to you. However, this is usually within one working day or so. It’s even possible to get the funds within an hour sometimes, which is a plus when you need the money as soon as possible for different expenses like urgent bills. In fact, when you need money quickly this type of loan can be a much better option than a conventional loan that takes a long time to process.
This might be surprising since it’s a short-term loan. However, the main limits are based on your salary and the lender’s range. So if the range is high and your salary is decent, you can get a fairly large loan. Keep in mind this won’t be like getting a loan to buy a house or car. However, if you need money for a small emergency, utility bill, groceries, there’s a good chance this type of loan will provide enough money for whatever emergency situation you have. That’s one of the most important features of this type of loan since it’s just as important to get the amount you need as to get it on time.
Another plus of pay-day loans is there are usually few requirements. This usually includes completing the application, a photo, proof of income, and that’s usually about it. If you can meet these basic requirements, there’s a great chance your loan application will be approved.
The main requirement that’s often included when applying for traditional loans as collateral. In the case of these loans, you won’t have to put up collateral whether it’s your home, car, jewelry, etc. The reason is it’s a small, short-term loan that you’ll pay back as soon as you get your next paycheck.
These are some of the many benefits of Payday Loans.