The best loan deals are available to people who have a good or excellent credit history. Cheap loans in the UK involve a careful assessment of your credit worthiness to determine whether your application will be accepted and how much interest you'll pay. Read this article to learn how to get approval for a low rate loan.
Criteria for a UK loan
Too many applications
Use a price comparison site to identify the best bank loans. Don't make too multiple applications because each search is recorded for 12 months and is detrimental to the likelihood of approval. Electoral register Lenders want to verify that the address information provided pairs off with what is recorded about you. If you aren't on the electoral roll, it's vitally important that you register before applying for a cheap loan. Age of applicant You'll need to be at least 18, preferably 21. The younger you are, the higher the cost of borrowing. Permanent address You'll need a permanent residence and will be expected to provide your addresses for the last three years. Credit history Lenders use personal pricing to determine the cost of borrowing. The better that you've managed your credit agreements, the lower the rate of APR you'll pay. If you do have a CCJ, IVA, delinquent account or have been declared bankrupt, you'll normally be expected to apply for a loan secured against the equity in your home.
How to get the cheapest loan
Credit report errors Order a statutory copy of your credit report from Experian, Equifax and Callcredit for £2 each. Scrutinise each report to check that the information held about you is factually accurate. If it isn't, the onus is on you to identify any problems and get them corrected. For example, debts that should have lapsed after six years, but continue to show as active. Pay your bills on time It isn't the quickest way to get good credit, but it's certainly the most effective. Paying your debts punctually is essential and will ensure that you become eligible for the cheapest loans. The longer it's been since you last defaulted on an agreement, the better this is for your credit rating. Each timely repayment will be reported to credit reference agencies. Pay down your debts If you have a lot of debts, use your savings to reduce the amount that you owe. If your level of indebtedness is deemed to be excessively high, you're very likely to be deemed a bad credit risk. Don't maximise out any of your cards. If possible, try to avoid spending more than 30% of your credit limit in a single month. Use several cards and don't carry your balance forward.