Just one year before, 52 % of British people voted in favor of Brexit, the historic mandate for leaving EU. Since then, speculations are being made about the impact of Brexit on the UK’s financial sector. The British households, the business community, and self professionals are eagerly watching each development concerned with their borrowing requirements of today and tomorrow.
Are your borrowing prospects getting affected by the current uncertainty over Brexit? How can you still avail a good deal for a personal loan or business loan even with not so good borrowing qualification?
The sense of because all the discussions over Brexit have so far been focused over “divorce” deal to find out a way to leave the UK, not over the post- Brexit results. Uncertainties over the future are sure to cut the growth rate. Any possibility for interest rate rise seems very dim. Companies may choose to reduce the stockpiles of finished goods, raw materials, and components, etc. as the majority of economists expect weak economic growth.
Whether you are a salaried person, self-employed or business owner, you are going to face the consequences of political and economic uncertainties resulting in low chances of getting a good lending deal. In a slow economy state, borrowing needs become more powerful, leaving you less time to try the different sources.
Seven Tips To Help You Get The Reasonably Priced Loan:
Analyze The Borrowing Requirement:
You may need borrowing for different reasons. Most of the time, these reasons seem justified, but when you analyze the loan requirement with perception to cost and repayment capability, some ways to avoid borrowing start appearing.
For example, you want extra money to increase and expand the stock during the festive season, but if you analyze the money requirement with a focus on expected profitability and possible odds, the money requirement may not be as much relevant and urgent; alternatively, you can ask the suppliers to supply the goods on credit.
Similarly, in case you need extra money to meet out personal expenses, analyze the need and explore the possibilities to avoid borrowing. For example, you feel funds shortage for home repairing. The possible ways to avoid borrowing for this cause may be – earning extra through part-time work, renting a portion of your home, renting your car, etc.
Optimize the Borrowing Requirement:
The easy accessibility of lending agencies in the UK has simplified the borrowing as well as it offers more than ever before options to choose the lender. But, you have to pay the interest also over the borrowed amount. So, optimize the required amount. For example, you need £ 1000 for a task; you can reduce the amount needed by dividing the objective into phases like stocking the goods in low volume or planning the home repairing in steps or changing your holiday destination. Instead of borrowing a significant amount in one go, better you take a small short-term loan; pay the first debt and take the next as the more trustworthy borrower.
Choose The Right Loan Type:
Choosing the right loan type is essential to get the best affordable deal. For example, taking a personal loan for business purposes is not a good idea; similarly, taking a small long-term amount of credit for the home renovation is not a good idea. Real, long-term loan reduces monthly repayment liability, but it increases the overall cost also. The UK lenders offer a wide array of loans designed for particular objectives and eligibilities; each loan like a quick loan, short term cash loan, no credit check loan, small business loan, loan for unemployed, etc. comes at different terms and conditions.
Assess Your Repayment Capability:
Getting a loan is easy, but repaying it in the agreed period is not as easy. Earnings in weak economic conditions, like in the UK at present, keep on changing; so, you can’t be sure of getting the fixed income months after months, whether, you are a salaried person or a small business owner. Some borrowers tend to borrow maximum as the lender can give, but most of such borrowers fall short in on time repayment. Assess your repayment capability is accounting risks and uncertainty factors. Never borrow more than 35% of take-home income.
Choose the Right Lender:
When you explore lending sources, you come across many sources like online direct lenders like Uncle Buck, Amigo Loans, satsuma loans, British Lenders, On Stride Financial in the UK, financial institutions, conventional mainstream banks, building societies, peers, etc. Each has its different rules for lending; therefore, selecting the right lender is very important.
For example, if you have a bad credit score, a bank may turn down your loan application, but a direct lender may accept your borrowing request similarly if you are entitled to govt. Benefits, trying to getting a particular interest can eliminate or reduce the borrowing requirement. For example, if you need borrowing during unemployment (jobseeker’s allowance), it may help you avoid borrowing from private sources.
Compare the Lending Deal and Negotiate:
OK, now you know ‘how much, for what and from where’. After the introduction of no credit check, bad credit or guaranteed loans, borrowing for almost anyone is possible, provided, he/she is a registered adult citizen of the UK under 80 years’ age but the cost matters. Here, you need to compare not only the proposed interest rate but the terms and conditions also including various apparent and hidden fees. The annual percentage rate (APR) is different than the advertised interest rate.
The factors that affect the cost of the proposed lending offer are – loan amount, repayment period, credit score, current earning, monthly financial liabilities, profession type, location, etc. Never forget to use your right to negotiate.
Take Time To Decide For The Best Lending Deal:
A lending proposal may seem right up to your primary requirements, but it may not be right on reasonable grounds. For example, a loan offered at the lowest interest rate may carry high fees and penalties. The loan provided at a low-interest rate may make you a ‘loan prisoner’. According to a report that appeared at Guardian News on Jan 2019, “Average UK household debt stands at £15,400. The unsecured debt is 30.4% of household income; it is the highest so far.”
Uncertainties over the future after Brexit are disturbing the ordinary households because of low-interest rates, reduced wages, less profitability, slow economy, etc. More and more families are experiencing the problems in managing the monthly expenses; therefore, borrowing emerges as the only way to survive even with a high possibility of being trapped for longer to pay back the debt. Still, the strategic approach may help you get reasonably priced, affordable, manageable and genuine lending deals.