Last updated: 16/10/2020 | Estimated Reading Time: 2 minutes
Frequently asked questions on loans
We've tried to answer as many of your questions as possible, if there is something missing from here which you'd like to know please do get in touch!
In This Guide:
- Will my credit profile affect my ability to get the best loan rates?
- Why is interest higher for short term loans?
- Can I still borrow money with a poor credit rating?
- How likely am I to be accepted for a loan?
- Will I need to secure a loan against my property?
- What purposes can I obtain a loan for?
- What if my financial circumstances change during a loans term?
Will my credit profile affect my ability to get the best loan rates?
Yes, the better your credit rating the more likely you are to get the lowest interest rates on your loan. For those with a bad credit profile, the higher interest rates reflect the increased risk on the part of the creditors in lending you money.
Why is interest higher for short term loans?
Interest rates are generally higher on shorter term loans, as there are increased administration costs in setting up the loan.
Can I still borrow money with a poor credit rating?
Yes, you should still be able to borrow money if you have a bad credit rating, but will likely be subject to higher interest rates. If you want to improve your credit rating, it is worth considering a bad credit loan or a credit card for bad credit it is important to obtain advice.
How likely am I to be accepted for a loan?
This will depend entirely upon the nature of your loan request and your credit history. There are loans out there for everyone though, and so it is unlikely that you will not be accepted for any loans at all.
Will I need to secure a loan against my property?
Depending on the amount you are borrowing, and depending on your credit history, you may, though probably will not, be required to secure your loan against your property. If you are required to do this, think carefully before accepting the loan since if you miss repayments, your property may be repossessed.
What purposes can I obtain a loan for?
- Starting up a new business
- Beginning a post-graduate course at a university
- Putting a deposit down for a house
What if my financial circumstances change during a loans term?
If your financial circumstances improve, you will be able to pay your loan off early, or arrange to change your payment plan in some way. You will need to discuss details of this with your creditors.