Personal loans have become a way of life for many, so being able to secure finance at a low rate APR is fundamental to survival. It can make the difference between affordability and subsequent default. Most importantly, the cheapest bank loans leave people with more money at the end of the month for other expenses.
Maintain a Good Credit Rating
Order a credit report copy from Experian to validate that all the information held is factually accurate. Having a good credit rating is fundamental to securing a cheap personal loan. It tells the lender what risk profile a new customer represents. The lower the risk presented, the more attractive rate of APR the customer pays.
Don’t Make Multiple Credit Applications
Making multiple credit applications sets off alarm bells for financial institutions so apply as sparingly as possible. It is far better to use an online loan comparison web site so that the best rate of APR can be identified. If there is a fit with the required credit profile, make that application.
The Importance of Lender Trust
When a customer has had a relationship with their bank for many years without problem they are likely to be able to get a cheap bank loan. Not only that, many banks will offer these reliable customers a lower rate of APR. Some have already pre-approved their customers for certain products and services.
Don’t Get Payment Protection Insurance (PPI) from the Loan Provider
The purpose of Payment Protection Insurance is to cover people for 12 months in the event that they can’t work. The problem is that banks charge considerably more than alternative sources. Customers aren’t informed that the exact same insurance can be purchased online for a fraction of the price.
Check that Existing Loan Agreements are Legally Enforceable
Approximately 60% of loans taken out prior to April 2016 do not comply with the Consumer Credit Act 1974. If the rate of interest is calculated incorrectly, a signature is missing, the number of payments isn’t specified etc the loan may well be unenforceable.
It is worthwhile getting a solicitor to examine any credit agreement for under £25,000 to see if the loan agreement can be written off. If the loan isn’t legally enforceable, the solicitor may be able to get it written off in full. Check this prior to debt consolidation.
Anybody with a clean credit history should be able to get a cheap bank loan. Those with bad credit shouldn’t despair as there are some higher APR products and secured loans available. Always be careful when borrowing as too much debt may prove unsustainable in the long term.