What to expect when searching for financing
If you are not sure what to expect when approaching lenders, here is a list of some important factors.
12:03 05 January 2014
Financing comes with a wide variety of options, and it is sometimes a challenge to know what to expect. One of the most common forms of financing is the loan. Here are a few points to consider about the loans so that you have an idea of what you can expect.
- Requirements— the most important aspect of financing that you should be aware of are the basic requirements. You would need to have steady employment, be a UK resident (usually with a UK address), and be over the age of 18. Some lenders have additional requirements such as specific credit scores.
- Comparisons—there are many different rates and terms to research so make sure you do not accept the first terms you find. Do a little bit of research to narrow down your best options and then compare to find the option that is right for you.
- Secured loans—if you do not have much credit history, or if your credit rating is on the low side, you might need a secured loan. The loan is given based upon a sort of insurance against the amount borrowed, such as a home or vehicle that is fully owned. The amount you qualify for may also depend upon the value of the collateral. Keep in mind that these loans may also have a higher interest rate as well. If you are not able to repay, the lender is legally able to take the collateral so they can sell it and gain the financing they might otherwise lose.
- Personal loans—these loans are unsecured loans, which rely heavily upon your credit worthiness. Your credit rating and income will determine if, and how much, you are able to borrow. Interest rates tend to be lower than secured loan rates, and favour those with better credit rating scores.