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Getting a Personal Loan: Private Lender or Bank?

There are many different places where you can get a personal loan, but you will need to be careful about what you decide. These days more and more people in the UK are getting their personal loans through private online-based lenders. Banks are also a popular option for loans, but which one is right for you? This article will help you choose the right option to match your needs. The lender you decide on for your loan will affect a lot of things, so you don’t want to rush into a decision.

Borrowing from a Bank

A lot of people still go to banks to get personal loans, and there are some good reasons for that. Banks are generally very reputable financial institutions, and their money is backed by the government. One of the main drawbacks of going to a bank for a loan is that you might not get approved if you don’t have good credit. Most banks have fairly high standards when it comes to how they will approve for even a small loan. This is one of the reasons why so many people are turned to private lenders online.

Borrowing from Private Lenders

Borrowing money from a private lender can be a good idea as well. Many private lenders have popped up online in recent years, and they have a lot of amazing deals to offer. A lot of people are applying for loans with these lenders because they are so easy to get. Even people with horrible credit can get approved for a personal loan online. The catch is that sometimes the interest rates can be pretty high.

Borrowing Amounts

Banks typically only give out medium to large sized loans, while a lot of private online lenders give out smaller loans. If you only need to borrow £50 to £500, an online lender could be the way to go. In fact, you might not even be able to get this size loan from a traditional financial institution.

Reputation

While you might be tempted to borrow from a bank because of their established reputations, there are plenty of trustworthy and legitimate private lenders. If you do want to get a private loan, however, you will need to do your research. It is crucial that you take enough time to find a lender that is completely legitimate and licensed. Make sure that you get proof of the lender’s credentials before choosing a certain one. A lot of people are hesitant to borrow from private lenders because they assume that they are all shady and untrustworthy.

The Loan Process

The process of obtaining a loan from a private online-based lender is definitely more expedient than going through a bank. The fact is that bank loans can take up to three to four weeks to process, depending on the amount. You can get an online loan from a private lender within as little as 24 hours. Those who are in desperate need of cash should consider going through a private lender for this reason.

Both bank loans and private loans will require you to fill out an application. Lots of banks have online forms for loans, but they typically take longer to complete. A standard online application for a private lender is fairly basic and only takes around 15-20 minutes to fill out in full.

When you submit a private loan online, you will hear back from the lender via email. If you get approved for the loan, you will be sent a contract to put your digital signature on. It is important that you take the time to read through the contract before signing. You won’t be able to get the money until you sign the legally-binding document.

Repaying the Loans

Private lenders are usually more flexible with repayment than banks. That is to say that they typically do not charge for early repayment, though it does depend on the lender. Banks usually impose very strict guidelines for repayment, which can make repaying the loan a hassle.

Fees and Charges

You could end up paying more for a bank loan than a private loan because of all the additional fees and charges. A good private lender charges minimal fees to make it easier for the person to repay their debt on time. Many banks force borrowers to pay a multitude of fees, which can quickly add up.

Should I get a loan from a Bank or Private lender?

There are a few factors to consider before deciding where to get your personal loan. If you are in a hurry for your money, a private lender is probably the better option. If you have a very good credit score, you might want to consider going with a bank. Private lenders tend to be more flexible and amenable, which is something to keep in mind before making a decision.

Top Student Loan Tips for College Graduates

If you have student loans that you want to start making a dent in, it’s important that you know how to do so as effectively as possible. There are a lot of different ways to go about doing this, and the more information you have the better. The more you learn about how to do all of these things, the better your chances are going to be of making significant progress with your loans.

Get Familiar with your Loan

It is important that you take the time to get familiar with your loan as much as possible. You will want to keep track of the current balance of your loan as well as the repayment status. You will find that these things and more will determine what your options will be like when it comes to repaying your loans. If you are not sure about some of these details, you can always contact your lender to get them.

Know your grace period

Since not all student loans have the same kind of grave period, you will need to make sure that you know what yours is. A grace period is essentially how long you will be able to wait to start paying off your loan after you finish school. It is very important that you get this information.

Keep in touch with your Lender

Make sure that you keep in close contact with your lender, notifying them if you change your phone number or email address. You will definitely need to make certain that your lender has a way of contacting you if they ever need to get in touch with you for any reason. If your lender is not able to reach you when something important comes up, it could end up costing you a lot. In the end you will certainly be glad you remembered to do this.

Choose the right Repayment Option

It is also important that you make a point of choosing a repayment option that will work for you. Chances are you are going to have a number of repayment options for your student loans, and it is crucial that you select the right one in particular. The option that you choose will ultimately determine just how likely you will be to pay your loan off within a reasonable amount of time.

Always stay calm

One of the best things that you can do when it comes to paying back your loans is to simply stay calm. There are a number of ways that you can postpone paying back your student loans, so you will want to stay calm and keep a level head at all times. A lot of people make bad decisions out of stress or panic, and that is something that you will definitely want to avoid altogether. The less emotional you are when it comes to paying back your loans, the better your chances will be of avoiding a complete disaster.

Don’t simply ignore them

While it might be tempting to simply ignore your student loans because you don’t want to even think about them, this is a horrible idea that you will later come to regret. Your loans aren’t simply going to go away, so you will therefore need to make a point of dealing with them in some way. It is very important that you take action when it comes to your loans, because otherwise you are going to find yourself in a very bad situation.

Prepay if you are able

If you are able to pay more than you are required to each month on your loans, you will definitely want to do it. A lot of people just pay the bare minimum, which is fine but it’s much better to pay more if you can. Remember that your ultimate goal is to pay off your loans as quickly as possible so that you don’t have to pay more interest than necessary. Not everyone is able to prepay on their loans, but if you can it is certainly something that you should do.

Student loans can be extremely stressful to deal with, but you will need to keep all of these things in mind as you try to pay them off. There are a lot of different ways to go about paying off your student loans, and the more information you have the better off you will be overall.

The Most Damaging Side-Effects of Bad Credit

Bad credit can be extremely damaging for anyone, and it’s important that you know how. There are quite a few potentially negative side-effects of a low credit score, and it can impact a lot of aspects of your live in a bad way. The more you learn about how important your credit score is, the more serious you are likely to be about maintaining it.

Higher interest rates on loans and credit cards

The fact is that having bad credit can be a huge deciding factor when it comes to how much credit you pay on a loan or credit card. Nobody likes having to pay a lot of interest, and the better your credit is the lower your rate is going to be. A low credit score almost always means paying a higher interest rate, and it’s important to keep that in mind when applying for a loan or credit card.

Being turned down for a loan

A lot of people with bad credit get turned down for loans when applying. While it’s true that having bad credit doesn’t necessarily mean that you won’t be able to get the loan you need, your options will definitely be more limited than if you had good credit. Those who have bad credit tend to have more difficulty when it comes to getting approved for loans, simply because lenders usually view them as liabilities.

Difficulty getting approved for an apartment

When your credit score sinks low enough, you might also find that it’s difficult getting approved for an apartment that you are interested in moving into. These days most apartments run credit checks on applicants, and having bad credit can mean not being able to find a decent place to live. Bad credit might not always stop you from getting approved for an apartment, but chances are you will have trouble getting into some of the nicer places.

Having to pay a security deposit on utilities

Some utility companies make those with bad credit pay a deposit in order to take advantage of the services they offer. This is not true of all utility companies, but more and more of them have started doing this. The size of the deposit that you will need to put down will depend on the company itself as well as just how bad your credit is.

Trouble getting a cell phone contract

Some cell phone service providers are hesitant to allow someone with very bad credit to sign a contract with them. These days a lot of these companies run credit checks on those who are interested in taking advantage of the mobile phone services they offer, so you will need to keep that in mind as well. Although there are firms who offer payday loans with no credit checks, you might be required to make a deposit in order to get a contract if your credit is really bad.

You could get turned down for a job

A lot of bigger companies, especially those in the finance sector, are starting to run credit checks on potential employees. There is definitely a chance that you could get your job application rejected if you have poor credit. Some employers view bad credit as a sign that the person is not dependable or responsible.

Higher Insurance Premiums

If you have bad credit you will also likely pay more for your insurance each month. When it comes to auto insurance, bad credit can really drive up your monthly premium. The better your credit is, the lower your premium will likely be. There are a number of different things that can impact your premium amount, and your credit score is definitely one of them.

You will definitely want to make a point of knowing what your credit score is by checking once a year with the three major credit agencies. By doing this you will know what your chances are of getting a loan or reasonable interest rate on a credit card. It’s also a good idea to start improving your credit as soon as possible if it’s gotten bad. The more you improve your credit, the easier your life will be overall. You will certainly be glad that you took the time to do this.