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Frequently Asked Questions
Q: What is the best way of comparing loans?
A: There are a number of factors that need consideration
when applying for a loan, but the single most important
factor is the loan A.P.R.
Q: What is the loan A.P.R ?
A: The A.P.R. on a loan represents the true cost of
a loan to you. The A.P.R takes into account the loan
interest rate and also any extra charges and makes it
easier to compare loans when borrowing.
Q: What happens if I can afford to pay the
loan off early?
A: If you wish to repay the loan early you have to
ask the lender for a redemption or early settlement
statement. This will provide information on how much
you have to pay to redeem the loan. You will not ( unless
the loan only has a few months left ) be required to
pay all of the loan interest due over the remaining
term. The method of calculating the loan settlement
figures varies, of loans up to £25,000 the maximum
you will repay is calculated using "the rule of
78".( this being a complex calculation governed
by the consumer credit act 1974 ).
Q: I have a bad credit record, will I still
be able to get a loan?
A: This will always depend on the lender, and in most
cases they will assess your case fully before making
a decision, taking into account many factors. The vast
majority of lenders use one of two major credit checking
companies. If you or someone at your address has defaulted,
or has a county court judgement, then it will probably
be on record. This record is searched every time you
apply for a loan, H.P., store credit or any other form
of borrowing so your history will affect the terms on
offer to you or whether or not you can obtain a loan
at all.
Q: What exactly is a secured loan?
A: Secure loans are personal loans made by a lender,
usually a bank or building society, that use your homes
or property as security.
Q: What happens if I already have a mortgage
or loan secured on my home?
A: You will find it is possible ( in fact common )
to have more than one mortgage or loan secured on your
property, most lenders will give a further mortgage
or loan providing there is sufficient free equity in
the property to secure the loan. Again, this will always
be down to the lender, and there is not guaranteed yes
or no answer.
Q: Are there any benefits to having a secured
loans as opposed to an unsecured loan?
A: The most important factor has to be that the interest
rate on secured loans is often lower than unsecured
loans. This is not always the major factor or positive
over unsecured loans, but you will find most lenders
are more likely to offer higher amounts with secured
loans.
Q: What happens if my loan application
is not accepted?
A: Occasionally a lender may not wish to give you a
loan, this could be for any number of reasons, but the
lender does not have to tell you exactly why you have
been refused! You can however ask for the name and address
of any credit reference agency the lender has used for
assessing the loan. There are hundreds of loan companies
in the UK, so if you do get your application rejected,
you can apply again to a different company.
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Car
Loan Guide
