Unsecured Loans
Considerations:
Where you have used our credit report tool you will know if you are paying too much on your debts. If the cost of your interest payments is too high we can direct you to the UK's lowest cost personal loan providers. Before taking action there are however a few points to consider.
Footprints
When you apply for a personal loan each application leaves a 'footprint' in your credit file.
This happens whether your application is successful or not.
A couple of recent 'footprints' in a credit file is ok but many more than this and the 'footprints' start affecting your credit score.
To avoid multiple 'footprints' you need to ensure you go to a lender who is more likely to accept you first time around.
Loan Size
The higher the loan amount the lower the interest you will pay.
When looking for a personal loan you do not want to borrow a penny more than you absolutely have to.
However lenders publish rates they charge for different loan amounts.
In some cases a slightly larger loan can actually cost you less as you may pay a lower overall interest rate.
Redemption Penalties
When taking out one loan to pay off other loans and storecards you need to know the redemption figures on your existing loans first.
Depending on the loan(s) you may have they may be larger than you think because of protection you bought or redemption penalties.
The only way to know exactly what you owe is to phone for a redemption figure. To put you off some lenders will only provide this if you write in.
This is designed to put off people from redeeming loans early. Companies adopting this strategy tend to be over charging for their loans.
Loan Period
The length of time you take the loan over also influences the rate of interest charged (usually the maximum for a personal loan is 7 years).
Not unsurprisingly loans which are taken over a longer period are of lower cost than short term loans.
Importantly then whilst it may look attractive to take out longer term loans the cost in interest terms will be higher overall.
Additional Charges
Finally when taking out a personal loan lenders are 'world class' at creating additional charges along side the loan.
These charges can include a courier service, arrangement fees, protection fees and administration fees.
Some of these costs can be avoided others can be negotiated away.
Use our FREE Credit Report to see if Remortgage is the right solution for you.
Unsecured loans: Main
Unsecured loans: Criteria
Unsecured loans: Considerations
Unsecured loans: Costs
Unsecured loans: Merits