Making a loan application

We now live in an age where the vast majority of the information we will ever need is just a swipe of the fingertip or click of a mouse away.

The first place we now go when we want to find out what something means or look for products or services is the internet, just a tap of a smartphone screen away. The availability and accessibility of the information and choices we are given has never been better.

The world of loans is no different. There is a seemingly endless list of loan products and packages on offer for pretty much any personal circumstances or financial situation. But is there a risk of information overload, and how can you make sure that you find the right deal for you amongst all the options available?

Steps in Making a Loan Application

There are a number of things you can do, however, to refine your search criteria in order to home in on the right deals.

  1. Check your credit rating first – companies like Experian will provide you with a credit score so that you can see how high a risk you would be to lenders. Whilst all loan companies conduct their own credit check using their own methodology and criteria, this will at least give you a good idea of where you sit on the risk scale in order look for the right packages.
  2. Know exactly how much you need to borrow it sounds a stupid thing to say, but before applying for loans, decide how much you realistically need to borrow, and for how long you want to pay it back over. Whilst you don’t want to be borrowing more than is necessary, it is all too easy to underestimate what you might need, and having to take out additional emergency loans to top up a shortfall can be very expensive.
  3. Use online loan calculators – these will help you to look at the various permutations for your loan and help you understand roughly what you can afford over what time period. This will save time when you come to comparing loan packages.
  4. Use comparison websites but don’t solely rely on them – there are a number of well-known comparison websites that will give you a list of suitable packages detailing loan repayment rates and terms. These save a lot of time and make it much more straightforward and to collect information on the right loans, but they don’t work with all loan providers so they won’t necessarily provide all the loan packages available in the market place. Do a simple web search to make sure there are no obvious players missing before deciding to make applications with the ones that they host.
  5. Be careful not to make loads of applications – making numerous loan applications can adversely affect your credit rating, so the “numbers game” approach is not necessarily advisable. If you’ve undertaken the right research, you should be able to target a select few loan packages that you want to apply for without resorting to a scatter-gun approach.

Ultimately, taking the time to do the right research will pay dividends in the end. With the amount of information readily available online, there is no excuse for going into a loan without knowledge of what you are getting yourself into. Although all the information can be quite overwhelming at first, if you know what you are looking for, you can cut through a lot of the promotional bluster that would otherwise leave you in a spin.

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