Cheap loans in the U.K. are only offered to people who have proved themselves to be good customers and reliable payers. You are going to need a good credit history and the ability to comfortably afford to make the repayments. The criteria for a low APR loan have been tightened, but there are things you can do done to get approval.
Why do lenders reject customers?
Although banks want to maximise their profits, they have been forced to examine their lending strategy since the credit crisis. Financial institutions want to offer customers the best loan deals, but they also want to avoid bad debt. This means that they can only offer cheap APR loans to customers who are least likely to default on them. Lenders now use personal pricing, which involves allowing people to borrow money at a rate of interest that reflects the probability of default.
How to get the best loan rate
If you are not on the electoral roll, it is essential that you register to vote. This is how the banks verify the address of the applicant. Unless they're 100% certain that you reside at that address, they aren't going to lend you any money. Reduce your debts If you owe too much money relative to your credit limit, you're statistically more likely to default on the terms of the agreement. Use personal savings to reduce your level of indebtedness and you're far more likely to get approval for cheap loans online. Correct credit report mistakes
You can order a copy of your credit report from Experian, Equifax and Callcredit for £2 each. It is essential that you scrutinise your report for mistakes and get these corrected before submitting your secured home loan application. Balance transfers
Moving your credit card balance to an issuer who is offering a low introductory rate is very attractive. However, it should normally be avoided if the credit limit is substantially lower. It makes you appear more financially exposed. Use old store cards If you have store or credit cards which have not been used for many months or years, it is advisable to start using them occasionally. The longer an agreement has been active, the greater the effect it has on your credit rating. Closing down old cards can cause your credit score to fall.