Cash Loans in the UK
People need money to do many things in life. This may be for education or business. It can also be used for many other things such as consolidating some debts, buying a car, or purchasing a new home. The financial situation of the world makes saving enough money to purchase these things extremely difficult for many people. This imposes the need to take some forms of a loan to take care of these financial responsibilities on these cash-strapped individuals.
However, many people do not know the type of loan that is appropriate for them. If they do, they simply do not know how to go about it. If you are a UK resident and need a loan, it is very important that you know the different options that are available to you. Therefore, read through this article and you will have relevant information that will help you make a wise decision.
Types of loans
If you are living in the UK, you have a lot of loan options to choose from depending on your need. Some of these options are:
If you appreciate tertiary education because of the benefits it offers, taking a student loan will be the best option for you if you are disadvantaged financially. The interest rate for a student loan is very low compared with other loans.
To get a loan in the UK as a student is very simple. You can do so through the Student Loans Company, an organization set up by the government of the UK to oversee the program. To be eligible for a student loan, you must:
- Reside in the UK.
- Qualify for a course that is approved by the government at a degree-awarding college or university.
If you are studying full-time, your student loan will cover your tuition fee and maintenance. You will be required to pay this loan back within the timeframe given.
If you are living in London, your student loan will be £9,000 while your maintenance loan will be £8,000 per annum. If you are living outside London, your maintenance fee will be £5,740. Students who live with their parents will be eligible for a student loan of £4,565 only, irrespective of where such students reside.
Whether you want to start a business or fund an existing one, taking a business loan may differentiate between realizing your dream of becoming a successful entrepreneur or not. Some lenders specialize in lending money for starting up a business while some others prefer helping small or medium businesses to remain in business. So, it is important to know the type of business loan you need in order to make the right choice.
Another important thing you need to know is that interest rates vary from one lender to another. You can get flexible interest rates from a couple of lenders while some others have their interest rates fixed. The requirements for eligibility are also not constant. Each lender has their eligibility requirements that you must meet before you will be approved for a loan. In the light of this, it is imperative that you consult more than a lender and compare their requirements so that you will choose the lender with the requirements that will make repayment easy for you.
However, there is this common factor among the providers. For a startup loan, your business plan must be sound and the business field must not be risky. The lower the risk involved in your business, the more ready the lenders will be to give you the loan.
For a start-up loan, you can’t get more than £25,000 and you must meet these requirements:
- Your business must be in existence for 12 months.
- Your credit rating must be good.
- You must provide collateral.
If you can provide all these, you are assured of a start-up loan. Repayment may start a month after taking the loan or some months later depending on the agreement between you and the lender.
If you have an existing business, some of the requirements are:
- The business must have been operational for 24 months.
- You must provide the financial statement of the business for two years. This should include your profit and loss statement, tax returns, financial projections, and other important documents that will support the viability of your business.
- You must also provide the lender the reason for taking the loan and the repayment plan you have put in place.
If you fail to meet these basic requirements, you will be disqualified from taking the loan.
If you consider buying a home and you don’t have the financial power to make outright payment for it, you should consider taking a home loan.
Before making a mortgage deal, do these:
- Check your credit score and see if it is good enough for the loan. If it is not, fix whatever may disqualify you from taking the loan.
- Do you have enough money for the initial deposit? If you don’t, put off the loan and save enough for the initial payment.
- If you have any outstanding debt, pay them off. The absence of outstanding debt increases your chances of getting a loan.
- Check if you have sufficient cash flow for the repayment. This may require that you go through your budget and see what you can adjust to make allowance for minimum monthly payment.
To qualify for the loan,
- You should make an initial deposit of 5% or more.
- Provide evidence of employment and how long you’ve been in the employment.
- If you are self-employed, you are required to provide your account statements, financial projections, and tax returns.
The cost of buying a home goes beyond making the initial payment and follow up with monthly repayment. There are other additional expenses that will influence the amount of mortgage loan you should take. These extra expenses include:
- Cost of evaluating the property: This is between £200 and £400.
- Local Authority Search: The essence of this is to determine whether there is a future plan to erect undesirable structures within the vicinity of the home.
- Solicitor or licensed conveyor: You have to pay either of these people to take care of the legal issues or documentation on your behalf. This will cost you between £450 and £1, 500.
- Land Registry: You must pay this if you want the papers of the home in your name.
- Stamp duty: if you home costs more than £125,000, you are required to pay the stamp duty. In that case, the least payment is £2, 500.
Add the cost of the home and the additional expenses to have an idea of the amount you need before you take a loan. Just like the business loan, there are lenders with fixed interest rates and others whose interest rates vary. Carry out a comprehensive research and analysis of the available lenders before you commit yourself to any one of them.
Debt Consolidation Loan
If your outstanding debts are giving you sleepless nights as a result of endless letters and ceaseless calls from your creditors, you can pay them off and concentrate on a single debt by leveraging the power of the Debt Consolidation Loan.
- This loan gives you the liberty to offset all your smaller loans by taking a bigger loan to service them.
- Debt consolidation loan also has other benefits such as longer payment period which gives you enough time to meet up with the payment without having to deal with late payment or defaulting in your payment.
- The interest rate is also low compared with the other smaller loans to encourage prompt payment.
- If you can pay as at when due, it will impact positively on your credit score. This is because if you can use this loan to clear your smaller debts, you can close your loan accounts and credit card accounts. This will give the lenders the impression that you are on top of your situation and can handle your finances very well. This is another important benefit that is hard to ignore.
In view of the above, a debt consolidation loan is a good option to eliminate your debt-related worries. However, it is crucial to consider the loan amount you need and the interest you will pay on such loan. In some cases, the higher you pay, the lower the interest. This may work to your advantage.
The debt consolidation loan plan is the best option for those who have some forms of short-term personal loans to pay or other unsecured loans such as credit card debts that may require them making series of repayments to different creditors every month.
Car finance loans
This is another loan you may consider if you need a new car, van, or motorbike. With this loan, you can easily realize your dream of owning a personal vehicle of your choice. This is the best option for you if:
- You have a poor credit rating.
- You don’t want to go through the process of haggling with a dealer about the financing of the vehicle and the price.
- You are a permanent resident of the UK.
- You are 21 or over.
- You have a bank account that offers Direct Debit. A building society account that has this feature is also allowed.
- You have a regular source of income with an annual income that is not less than £6,000.
- You are not guilty of bankruptcy within the last 6 years.
- You are free from IVA over the same period of time.
These are just the basic requirements for getting a car loan. If you meet these requirements, you will be contacted within a couple of minutes if you apply for the loan online. Within a few days, the money will be deposited into your account if you are eligible for the loan.
A payday loan is usually available if you want to get some financial issues settled before your next payment. With it, you can secure a loan up to 1,000 which you are expected to pay back within 2 weeks or more. The duration of the payment depends on your income and the agreement between you and the lender.
Before you proceed with a payday loan, make sure you have the financial power to make prompt payment. You can also consider the cost-effectiveness of the loan.
Small cash loans
Some known small cash loans include:
- Doorstep loans: This is a loan option where you can borrow up to £2500. Payment can be made between 14 to 52 weeks and fixed. You can even get the loan delivered to you at home without the need for using a bank account. It has a high APR of 399.7%.
- Guarantor loans: Guarantor loan offers £750 provided you can present a guarantor. This loan option is good if you have a bad debt to settle. You can receive the cash payment within 24 hours.
- Installment loan: In this loan option, for up to 24 months is possible if you take a loan of £2000. This loan doesn’t require any guarantor and has an APR of 299%.
Now that you have known the different loan options you can choose from, where can you take a loan in the UK?
Lenders in the UK
The United Kingdom has many reputable loan organizations that are ready to give you the needed loan to meet your financial needs. Some of these are:
- NI Small Business Loan.
- Start-up Loans.
- Ulster Bank.
- Funding Circle.
- Economic Solution.
- Boost Capital.
- BCRS Business Loans.
This is an incomplete list of lenders in the country. You can carry out a comprehensive research on these organizations in order to know the ideal provider for you. Instead of breaking down under the weight of financial difficulties, you may consider taking one of these loans. If you carefully make a decision based on thorough research and good planning, you will find repayment very easy. Within some years, you will be financially free if you take the right step today.