Archive August 2018

Guide to Logbook Loans

Guide to Logbook Loans

Looking for easy finance? Or not getting loans from high-street lenders due to adverse credit rating? If you have your own car, it’s possible for you to easily get a loan despite a bad credit score. Many people have a history of poorly-managed credit in the past. They find it very difficult to get unsecured personal loans. However, secured personal loans are easier to come by, especially if you own assets like a motorbike or car.

What Are Logbook Loans?

Logbook loans are secured loans given against a vehicle you own like a motorbike or car. It’s an excellent option for people who don’t want to go through the traditional route and waste time. Even in case of bad credit, lenders give logbook loans as there is less risk to them. They can be a quick and convenient way to get the cash you need when you need it.

Logbook Loans

How Do Logbook Loans Work?

Before you hand over your logbook, you must understand how such types of loans work. This will give you a clear idea of what you’re getting yourself into. Logbook loans provide credit if you own a vehicle and are ready to use it for getting credit. Usually, the ownership of your car passes temporarily into the hands of your lender. That’s because you’re getting money only on the value of the vehicle. You can still drive the vehicle so long as you keep to the terms of the credit agreement. You can borrow a sum upto 70% of the value of the vehicle. Depending on your financial situation and worth of the vehicle, a payday loan may allow you to borrow significantly more. So, it’s a good idea to explore various options before signing on the dotted line.

Most lenders offer interest rates starting from as low as 99%. Once you pay off the entire loan, the lender will return your logbook and the car will be yours once again. Yet, if you struggle to keep up with the repayments, the lender may sell your car to recoup their money. Every lender has different criteria and you should check how much amount of loan you qualify for based on your vehicle. Generally speaking, your car should have a resale value of at least a £1,000, free from any car finance you’ve taken (or nearing end of agreement) and be less than 10 years old.

Is There A Vehicle Check Before Getting Approval?

Logbook loans require you to prove your ownership with a logbook or V5 registration document. The lending company will take this document into their possession once you sign the credit agreement. There will be an HPI check on your vehicle to establish its value, term of vehicle finance debt and your ownership of the vehicle. Once this is done, you’ll have to give your personal details such as address, income and monthly expenditure. The lender will run a credit check to assess how much you can afford to borrow. But, you should do a self-check and not leave it to a third party to make decisions for you.

How Can I Apply For These Loans?

You can take out a logbook loan either in person, over the phone or online. Sometimes, you get approval within one or two hours. Also, you can choose how you want to receive the money- by cash, cheque or directly into your bank account.

Is It Different Everywhere in the UK?

If you are a resident of England, Wales or Northern Ireland, you’ll usually sign a Bill of Sale at the time of the agreement. This Bill authorizes the lending company to repossess your vehicle without a court order if things don’t go as expected. It also transfers temporary ownership of your vehicle. Lenders allow their customers to drive their motorbike or car if they keep making repayments on a regular basis.

In Scotland, the law works differently. If you apply for a loan here, it’ll be under a different agreement as Bill of Sale doesn’t apply. You’ll more likely get an offer for Hire Purchase Agreement that offers a higher level of consumer protection.

Okay… How Much Do Logbook Loans Cost?

Remember that these are an expensive form of credit with APRs nearing 400% or higher. In addition to this, you may also have to pay substantial loan charges. In some ways, taking out a standard personal loan may be cheaper. It’s a risky business, so be clear on what you’re doing.

What Are the Benefits of Logbook Loans?

This kind of secured loan can be beneficial as well as fraught with risk for you as a borrower. Although you get cheap lending, you also stand to lose your car if you don’t keep up with the repayments.

  • Lower Interest Rates:
    Typically, logbook loans carry lower interest rates compared to other types of loans for bad credit like payday loans. The APR (interest plus fees) is between 99% – 450%. These vary among lending companies so you should compare and choose. You can reduce your interest payments by opting for a low APR deal and clearing the loan as soon as possible.
  • Borrow Upto £50,000:
    As it’s a secured loan, you might be able to borrow upto £50,000 which is higher than any payday or personal loan you can get. The amount you can get depends on the following factors-
    The value of your car
    Your credit history
    Your income and expenses
    The maximum limit the loan provider offers
  • Longer Repayment Period:
    As compared to payday loans, you can repay logbook loans in small instalments over 12-36 months. This allows for budgeting and getting your finances in order.
  • No Early Repayment Penalty:
    Lenders won’t charge you a penalty if you decide you want to pay back the loan early. Sometimes, partial resettlement is possible so that interest on the remaining amount reduces. By all means, aim to repay logbook loans early if you can afford it.

What Are the Risks of Logbook Loans?

The risks of logbook loans are outlined below:

  • You may lose your car if you don’t repay the monthly installments.
  • The level of consumer protection is not the same as a Hire Purchase agreement.
  • You need to be the legal owner of a vehicle having a value of over £1,000 and with no debt on it.
  • Interest is much more for this secured loan than for an unsecured loan from a  mainstream lender.

Get Free Advice

We offer free loan advice if you have doubts whether a logbook loan is the one for you. Get in touch with us, if you have bad credit & need doorstep loans.

 

 

 

Doorstep Loans

Doorstep Loans

Are you looking for a personal loan you can get easily? Are you worried lenders will turn you down because of bad credit? We are here to put your fears at rest. We are one of the top lenders in the UK and have developed expertise in bad credit loan offerings. Increasingly sought out by people with a bad credit score, the trust factor is high due to our excellent customer service. If you’re looking for doorstep loans, keep reading further.

 

What Are Bad Credit Loans?

Whether you like it or not, every UK citizen has something called a credit file and credit score. This credit file records details of with whom and how individuals made financial credit transactions. That means any loans or credit cards you might have taken in the past all show up on your credit file. Three major credit agencies in the UK maintain credit files and make them available to lenders on request. They can then assess the credit behaviour of an applicant and decide whether they want to approve their loan application or not.

Now, it so happens that people who have poorly managed credit in the past find it tough to pass lenders’ filter test. Almost always, their applications end up in the trash bin. However, bad credit lenders like us want to simplify the tough times. We offer a variety of personal loans no credit check. So even if you suffer from bad credit, you can find a cure with us.

 

What Are Doorstep Loans?

Doorstep loans are very easy to understand. Simply put, these are loans that you can get sitting in the comfort of your own home. There is no need to visit a hundred lenders or submit many online loan applications. Doorstep loans are a kind of personal loans. Every lender has a representative in every locality. So, based on where you live, you’ll be dealing with a self-employed agent of the lender. This agent will come to your doorstep and have a one-on-one discussion to understand your financial situation. If they find everything satisfactory, you’ll get cash in hand in no time.

 

How Do Doorstep Loans Work?

If you apply for doorstep loans, you’ll make payments from the comfort of your own home. You won’t have to go somewhere or pay back your loan online. An agent will come to your doorstep and explain anything you need to know. This agent is a person appointed by the lender for your locality. You’ll finalise all the paperwork in a face-to-face interaction with the agent. They will understand your financial circumstances and give proper advice. Note that during the entire loan term, you’ll deal with this agent and not directly with the lender. This develops a sense of familiarity. Every week or month, the agent will come to your house and collect loan repayments.

Doorstep loans are cash loans. They are finalized within a short period and interest rates remain the same throughout the loan period. This helps in budgeting as you can work out ahead of time how much you can afford to pay back weekly. You don’t need to make any lump sum payments.

The agent who visits you will sanction your loan and pay you cash up front. They will also collect payments from your door. So, they are always available for discussion at a time and place convenient to you. You’re not just ‘another number’ flashing on the mobile screen for them. A few credit checks might take place, but if your lender gives bad credit loans, this shouldn’t be a serious problem.

doorstep loans

Why Should I Prefer You For Doorstep Loans?

Because we’re probably your best-go for bad credit loans. In case you want doorstep loans without a credit check, it’s possible with us. Making ends meet when unexpected costs crop up can be quite challenging. Our customer service puts the limelight on convenience as a friendly, local agent will discuss your loan options in your home itself. Our agents are qualified to deliver customized deals for every individual’s requirements. We won’t charge any additional fees or hidden charges. Even if your circumstances change, you’ll pay only what you borrowed. Moreover, we are an FCA-authorised lender and advise you to beware of loan sharks.

 

What Are The Pros of Doorstep Loans?

Doorstep loans have more pros than cons. Some of its pros are:

  • Instant Decision:
    When the agent visits you at home for the first time, they will go through your application and give instant approval. So you don’t have to wait to get the money.
  • No Need for Bank Account:
    Don’t have a bank account? No problem. As you both borrow and pay doorstep loans in cash, there is little need for a current bank account. You don’t need to open a bank account for getting doorstep loans for bad credit.
  • Personal Service:
    These loans offer personal services as you deal with just one agent. You can fix up a meeting in the comfort of your home. You’ll also deal with that agent throughout the entire process. This creates familiarity and understanding between both parties.
  • No Record on Credit File:
    Remember that whenever you take out doorstep loans, lenders won’t disclose it to credit agencies. There is no official record on your credit file that can affect your credit score. Therefore, there is less worry even if you fail to make one or two repayments. However, taking it lightly may lead to serious consequences.
  • Credit Score Doesn’t Matter:
    If you have a less-than-perfect credit rating, some lenders like us are willing to consider you for doorstep loans. Get in touch with us now.

 

What Are The Cons of Doorstep Loans?

These types of loans are not without their cons. They are:

  • High Interest Rates:
    You may find that the APR is unusually high for such types of loans. Interest rates tend to be higher than other types of lending.
  • Low Principal Amount:
    If you wish to borrow a huge sum of money, doorstep loans aren’t the right option for you. Generally, the maximum you can borrow with such a loan is £1,000.

 

Final Word

We feel doorstep loans are a last resort to solve your financial troubles. If you have bad credit and want a personal loan, you’ll be better off looking at other personal loans we offer.

 

Personal Savings Allowance Explained

Personal Savings Allowance Explained

As a UK citizen, there are a number of ways you can manage your money. Banks offer a variety of accounts for customers to choose from. The most popular ones are current account and savings account. A current account provides the facility of deposit and withdrawal for day-to-day use. A savings account is slightly different. It pays you a certain rate of interest on the money you save in that account. Although tax follows income everywhere, personal savings allowance can reduce your tax outgo. But first, let’s find out what’s the use of a savings account.

 

What Does A Saving Account Do?

A saving account is a kind of bank account which you use to save money. Usually, once you get your salary, it gets spent in one or the other way. It becomes very difficult to save money for future needs or emergency. With a saving account, you can inculcate the essential habit of saving. Every individual should save as this is the money you bank on in a financial crisis. This bank account pays their account holders regular interest on their savings. It’s either credited to the account at the end of 12 months or paid monthly if the customer wants. Opening a saving account is an easy way to get your money to bring in more money. You can use your savings for fun e.g. an overseas vacation or for investment purpose, e.g. deposit for a home loan, it can also help you in any sudden expenses so that you don’t have to borrow any bad credit loans.

 

What Is Personal Savings Allowance?

Now you know what a saving account is. But, you still need to get a clear picture of the types of savings accounts. For convenience’s sake, we divide a saving account into two types- Cash Isas and non-Cash Isas. Cash Isas (Individual Savings Account) allows you to earn tax-free interest. The tax rate is 0% for interest on Cash Isas saving account. However, non-Cash Isas and current accounts charge tax on interest. Here’s where the personal savings allowance comes into play. This allowance provides different maximum limits to different tax brackets. If you fall within a particular tax bracket and your interest is below the limit, it’s tax-free. The government introduced this in 2016.

 

How Does Personal Savings Allowance Work?

Let’s first get an overview of the UK tax slabs for 2018-19.

Basic Rate 20% £11,851 to £46,350
Higher Rate 40% £46,351 to £150,000
Additional Rate 45% £150,000 and above

 

Those earning an annual income between £11,851 and £46,350 have to pay 20% tax on their earnings. Those with an income in the range of £46, 351 to £150,000 have to pay 40% tax. An income exceeding £150,000 incurs 45% tax.

Basic-rate taxpayers are eligible for tax-free interest upto £1,000 whereas higher-rate taxpayers are eligible for £500 of tax-free interest. Additional-rate taxpayers have to pay tax on all their savings interest.

 

How Is Personal Savings Allowance Useful?

If your saving account is anything other than a Cash Isas, personal savings allowance is of great use. Below are a few examples to explain how it works:

For 20% Taxpayers

Scenario 1: You earn £23,000 annual income and £600 savings interest

Scenario 2: You earn £23,000 annual income and £1,200 savings interest

In the first scenario, the entire interest is tax-free as it’s below £1,000. In the second scenario, 20% tax incurs on £200.

personal savings allowance

For 40% Taxpayers

Scenario 1: You earn £90,000 annual income and £450 savings interest

Scenario 2: You earn £90,000 annual income and £600 savings interest

In the first scenario, the interest is tax-free as it’s below £500. In the second scenario, 40% tax incurs on £100.

 

Where Is Personal Savings Allowance Not Relevant?

Cash Isas saving account and some NS&I financial products like premium bonds are already tax-free. So personal savings allowance is irrelevant. They are most useful for non-Isa savings accounts and current accounts. You can take the benefit of personal savings allowance even for interest from:

  • Bonds- government or corporate
  • Peer-to-peer loans
  • Income from bond funds, open-ended investment companies and trusts

Income from investment is taxable in two different ways- as savings or dividends. Earnings from loan-based investments are taxable as interest, whereas those from company shares are taxable as dividend income. If you have a property on lease, the rent you receive will be considered as work or pension income.

 

What If My Interest Is More Than My Personal Savings Allowance?

It can always happen that your interest earning is more than the maximum personal savings allowance you’re eligible for. If so, banks and building societies automatically deduct tax through PAYE (Pay-As-You-Earn). You can also declare the extra interest on a tax self-assessment form. There are plans in the making to revolutionise the working of the current UK tax system.

 

What Should I Do If I Paid Too Much Interest?

Sometimes, even banks and building societies might make mistakes. They might calculate and wrongly deduct extra tax without considering personal savings allowance. In such cases, account holders can receive a refund from the tax authorities. All you need to do is fill in and submit the R40 form to the government. If you notice that your bank has been wrongly deducting tax on interest, you can claim a refund upto four previous years. Normally, it takes time for the tax authorities to process your claim. It’s advisable to wait till around six weeks to hear back from them.

 

What If I Have A Very Low Annual Income?

Like in most countries, tax in the UK doesn’t start from an income of £1,000 or £2,000. There are privileges and exemptions for low wage earners. Employees earning under £11,850 don’t pay any tax on their income. This is called personal income tax allowance. It’s an extra tax break in addition to personal savings allowance. It’s not bad even if you earn a small paycheck.

 

Then Are Isas Meaningless?

Some things may make you think that Cash Isa saving account is meaningless. Non-Isa bank accounts offer a higher rate of interest and there are loads of exemptions for low wage earners. Yet, Isas are beneficial if you save more or earn more yearly income. The best way to make your money plant grow into a tree is by boosting returns and reducing tax payment.

 

Read more:
Types of Business Loans?

Business Loans – Types & Pros & Cons

Business Loans – Types & Pros & Cons

A business is always in need of funds. Be it for production, marketing, payroll or expansion, varying amounts of money are necessary at different stages. Owners may not want to dip into their bag of profits. Banks and other private lenders offer business loans for a business’ unique requirements. They are similar to personal loans but are taken in the name of your business. The reason is that a business is a separate entity in the eyes of law. Directors can carry out transactions in the name of their business.

Meaning of Business Loans

Business loans are a form of immediate finance that businesses can get from banks or building societies. Many times, obtaining a loan is more practical than using up your profits. With external financing, you can borrow and repay them as and when you like. The interest you pay is often only on the amount of loan you actually use. You can borrow as little as £1,000 or as much as £3 million. You can also choose your own loan term- from 1 month to 15 years. These unsecured or secured loans can help to fund fixed as well as working capital needs. Loans that are not secured are given only on your business’ credibility and creditworthiness. Secured loans, on the other hand, are easier to get as the lender takes less risk. Individuals can’t borrow long term business loans.

 

Types of Business Loans

Various funding options are available to a business at the stages of start-up, expansion and diversification. You can read more about them further.

  • Startup Loans:
    Nowadays, it’s more profitable to start your own business in the UK. Shifting from employment to business translates to more freedom. You can chart your own growth. Unlike in employment, the more efforts you take, the more profits you’re likely to earn. The government has always been in support of new businesses and young entrepreneurs. Any first-time entrepreneur(s) can obtain startup business loans at a low interest rate from the UK government. You can borrow upto £25,000 or less, as per your business needs. You also get five years’ time to pay it back with profits.
  • Working Capital Finance:
    If you’re looking for funds to buy land or an office space, working capital loans will provide little help. Because they’ve been designed to match the day-to-day cash needs of the business like wages, stationery, power and water bills, etc. You can’t buy assets with such form of business finance. Some lenders may also ask for a Personal Guarantee from the Company Directors or Owner. If the business is unable to pay back the loan, lenders have the authority to seize and auction the Directors’ personal assets.
  • Bank Loans:
    Your business can also get funds from banks or building societies in the UK. Banks and building societies lend out a lump sum in the form of business loans. You repay it over an agreed period of time along with interest. Like for working capital loans, banks ask a Directors’ guarantee for their loans.
  • Revolving Credit Facility:
    As the name suggests, a revolving credit facility means that credit is always revolving. You can borrow and return as and when you want. With such facility, you aren’t taking on a long-term debt.
  • Peer-to-Peer:
    Peer-to-peer loans are not given by any financial institutions. High-profile individuals with lots of money give out such loans. They usually look for earning returns on the money lying in their bank accounts. They may also ask a business for a personal guarantee.
  • Short Term Loans:
    Short term loans are taken for a short span of time, typically from a few days to a few months. They are mostly taken for fulfilling short term funds requirement. Accordingly, monthly interest and not annual interest applies to such business loans. This may prove costlier in the long run. So it’s best not to make it a permanent solution.
  • Asset Backed Loans:
    When a business has some assets like land, building, machinery or stock, it can use these assets to get a higher principal amount. Usually, lenders are willing to give more amount of such loans as they are secured with assets. There is a low risk of the lender losing their money even if the business defaults on its payments.
  • Invoice Finance:
    Invoice finance is a form of business loan that works with the invoices you’ve issued. An invoice is a receipt which is given to customers who buy from you on credit. Lenders give you a loan in exchange for invoices equal to the sum of the loan. When the customers make their payments, it goes directly to your lender. They’re of two main types- factoring and invoice discounting.

business loans

Pros of Business Loans

  • Conveniently Accessible:
    Most businesses maintain their profits accounts with a bank. As they become familiar with you, you’re likely to get more preference when applying for a loan with them.
  • Multiple Options:
    As we saw above, an entrepreneur can choose from various types of business loans. It doesn’t matter whether you’re a startup or an established company, there’s a loan for you.
  • No Profit Sharing:
    If you go for angel funding or venture capital, those investors and capitalists almost always ask for a share in your profits. This may leave you feeling you’re working for them rather than for yourself. With banks and private lenders, you can avoid all this fuss. They only interest themselves in interest and partial loan payment instalments.
  • Lower Rate of Interest:
    Banks and building societies charge a lower rate of interest on business loans than instruments like credit cards.
  • Tax Relief:
    When you use a part of your profits to make business loans repayments, you usually get an exemption from tax.

 

Cons of Business Loans

  • Lengthy Process:
    It may take a long time for a bank to verify details and sanction your loan. There are lots of forms to fill. You can avoid this by approaching a private lender.
  • Preference to Running Businesses:
    If you’re a startup that is still young, it’s unlikely you’ll have records to show of your worthy credit behaviour. This may make it very difficult to acquire unsecured loans.
  • A Lot of Prerequisites:
    There are a lot many prerequisites that a business should fulfil before they clear the loan approval process.
  • Risk Of Losing Assets:
    It’s not easy to search for the right assets at the right price. If you attach these assets to your loans and fail to make repayments, you stand the risk of losing it all to others.
  • Lesser Loan Amount:
    An entrepreneur may find that banks are willing to give only 70% or 80% of the money he actually needs. Thus, he or she will have to scout around to fill this gap.

Bank Accounts For Kids

Bank Accounts For Kids

Many parents like to keep money aside for their children’s future. If children are told about money and finances from a young age, they grow up to become responsible individuals and citizens. There are many ways you can collect money for your kids and one of them is by means of a bank account. Though bank accounts for adults are a popular and hot topic, hardly anything is spoken about bank accounts for kids. Though you can go for long term personal loansIt’s always a good practice to start putting money into your children’s bank accounts for their education or wedding in the future.

 

What Are Bank Accounts?

A bank account is an arrangement with a bank of your choice. You can deposit and withdraw money to and from your account respectively. You can also set up standing orders for regular monthly payments like rent, utility bills, mortgage, etc. For saving money with them, banks also pay a certain rate of interest on your savings. This helps you to grow your savings. There are different types of bank accounts like Current account, Savings account, Post Office Card account, Basic Bank account, Joint account and Bank accounts for kids.

 

What Are Bank Accounts For Kids?

If your child is above the age of 11, you can easily open a bank account for him or her. This inculcates the habit of saving in children from an early age. When they save enough, they can buy anything they want with their debit card. Your children will learn to be independent of their finances. Basically, they are the same as adults’ current accounts but are for kids below the age of 18. They usually come with some restrictions on how to use them. There is no need for worry as they’re minors and can’t take any loans. Once you set up bank accounts for your kids, explain to them in simple language how they work and how they can invest their money. Avoid using jargon as it’ll only increase the confusion in their minds.

 

Who Can Open Bank Accounts For Kids?

Bank accounts for kids are meant for individuals who are at least 11 years of age. Some banks may have a higher age limit like 16 years. Till 18, they’re eligible to open bank accounts as children. After this age threshold, the bank account will be upgraded to an adult’s current account. You, as a parent, can help your children in getting their own bank account. Banks let children make financial decisions and run their account themselves. The parent or guardian can help pay money into their account and give them financial advice when necessary.

 

What Are The Features of Bank Accounts For Kids?

Each children’s bank account comes with different features but some of the common ones are:

  • Receive Money:
    If your child turned 16 last month, it’s likely that he or she will be doing some kind of job. Once someone reaches 16, employers need to pay them by PAYE as per UK child employment laws and regulations. You may also deposit some deposit into their account every month. They can receive money into bank accounts for kids by cash, cheque or bank transfer.
  • Make Payments:
    When you open a bank account for your children, they’ll get a debit card or cash card which they can use to make payments. With this card, they can make purchases in shops, withdraw money from cash machines and also shop online. If your kid is under 16, the bank will ask your permission before issuing a debit card for the account.
  • Net Banking:
    Your child is also eligible to carry out transactions between accounts with the help of Internet and Netbanking. They can check their current account balance, move money from one account to another or send someone money.
  • Direct debit:
    Direct debits are also known as standing orders. These are monthly payments that your bank to make on your behalf. Bank accounts for kids offer this special feature of requesting a direct debit for some regular expense like a monthly phone bill.

bank accounts for kids

How Can They Manage Their Bank Accounts?

We give some basic ways that will help your children manage their own bank accounts.

How To Check Balance:

  • Sign in to Mobile or Internet Banking
  • Set up text alerts for change in balance
  • Check your statement by post or online
  • Visit the bank branch
  • Phone your bank
  • Check it at a cash machine

 

How To Use Mobile Banking Services:

  • Pay a person or company
  • Check your balance
  • Move money between your accounts
  • Set up standing orders, change or cancel them
  • Report a missing debit card
  • Send a secure message to your bank

 

How To Withdraw Cash From an ATM:

  • Insert your card into the ATM machine
  • Enter your PIN
  • Check your balance if you’re not sure how much is there
  • Choose the amount of cash you need
  • Collect your card and cash from the machine

 

Where Can I Apply For Bank Accounts For Kids?

Almost all banks offer bank accounts for kids. There are some things you need to check before choosing an account. Choose a bank which has its branch and ATM in your locality, and provides a debit card and Internet banking facility. You also need to check the age limit as in some banks, children are only eligible after 16. You should also find out what the minimum balance and tell your children that they must always have that much money in their current account. Check for any special privileges like:

  • Interest on your balance
  • Rewards you get when you spend e.g. cashback
  • Freebies like discounts on driving courses

 

How Do I Apply?

You can open bank accounts for kids online with little effort. It gets done in a matter of minutes. You may need to visit the branch along with your child to provide identification documents.

 

What Documents Do I Need?

Banks usually ask for two documents to establish your identity when you open an account for your child. These are:

  • Proof of Name- Passport, Birth Certificate or Driving License
  • Proof of Address- Utility bills or bank statements in parent or guardian’s name

 

Are There Any Charges To Operate The Bank Account?

It’s unlikely that your child will have to pay monthly fees or overdrafts. But crosscheck the terms and conditions. Any interest is normally paid without deducting tax.

Bank accounts for kids are an excellent way to instil financial confidence in your children and make them capable of managing their money.
 

Student Loans – Get Your Facts Right

Student Loans – Get Your Facts Right

After secondary school, many students and parents alike face a dilemma. It’s every parent’s dream to send their children to a good university. But they may put it off if they can’t really afford it. Because well-known universities attract high-paying jobs, the UK government has come up with the initiative of student loans. These are loans meant only for students who want to pursue higher education.

 

What Are Student Loans?

Student loans are loans that individuals who wish to study further after primary and secondary education can take. They help students complete their studies and bag enviable jobs. A student need not worry about tuition fees, paying for books, stationery and living. The money takes care of it all. While it was introduced by the government for the first time, some private lenders are also coming up with cheap loans for those willing to go to university. Students start repaying only after they get a job, though interest starts right after the sanction of the loan. There are additional privileges for disabled and low-income persons.

 

Student Loans Myth busters

It’s important to bust myths and misunderstandings doing the round. For this, you’ve to get your facts right. Else, a golden opportunity may just pass you by.

  • Cost and Price Are Two Separate Things:
    With student loans being as high as £50,000, many students and parents are very doubtful whether they’ll be able to repay it after all. Add to that, headlines screaming “Living loans got bigger in 2017”, the risk factor got a massive boost. But, this fear is totally unnecessary. The price tag of the university is irrelevant in the case of student loans. What matters is how much you have to repay. Those who earn a lot repay a lot while those who manage only a less-paying job pay nothing or little in repayments.
  • No Cash Isn’t Equal to No University:
    You can go to university even if you don’t have cash in hand. Once you apply for a student loan, most lenders will directly pay the tuition fees. You’ll probably need a loan for living costs too if you aren’t living with family. Full-time students start repaying only in April (after they graduate), irrespective of what the course duration was.
  • You Repay Only If You Earn Above £25,000 Per Annum:
    Student loans work on the principle of ‘pay when you earn’. According to the government, those who earn more made the most of university. The less you earn, the less beneficial university was for you. Keeping this in mind, people who earn less than £2,083 (£25,000/12) a month pay nothing at all. If you exceed this income threshold, you’ll have to pay 9% of the excess. For example, if you make £30,000, it’s £5,000 above the minimum limit, so you’ll pay £450.
  • Freedom From Debt On Repayment Or After 30 Years:
    One of the facts of student loans is that you stop making repayments when either you clear the loan or after a period of 30 years from the April following your graduation. Whichever of these comes first. And if you never got a job with an annual income above £25,000, you won’t have repaid a single pound towards your student debt.
  • Away From the Debt Collectors’ Chase:
    Once you start earning, your repayment for student loans will be automatically deducted through the payroll like income tax. That means the salary you get in your bank account will be after deducting this monthly amount. You don’t need to have tension about debt collectors chasing after your life for the money. It also means that you have little choice in the matter and can’t escape the repayments.
  • Interest ‘Above Inflation’:
    There have been some major changes for students who joined any university in 2012 and later. Earlier, there was no ‘real’ cost to borrow money via student loans as interest rate was set at RPI (rate of inflation). Now a student has to pay interest as follows:

student loans

During the course:
RPI inflation plus 3% on outstanding balance which continues upto the first April after graduation

Earning £25,000 per annum:
RPI inflation accrues

Earning between £25,000 and £45,000 per annum:
Rise from RPI inflation to RPI plus 3% with an increase in earnings

Earning above £45,000 per annum:
RPI inflation plus 3%

This is the case for positive inflation (rising prices and standard of living). It doesn’t apply for deflation (falling prices).

  • Accessible to Part-Time and Post-Graduate Students:
    Student loans are not only accessible to full-time students but also to part-timers and post-grads. Part-timers are those who study for a few hours in the day and work at night. Or vice versa. Almost 40% of all undergraduate students are part-timers, thus lenders are offering loans to them as well. Post-grads are those who want to apply for a Master’s or Doctoral degree can get loans easily. They only need to repay if they start earning enough at the end of their course. Students can apply for loans upto £25,000.
  • University Branding Makes No Difference:
    If you aren’t already aware, universities charge approximately £9,000 for a full-time degree. This is only going to increase with inflation. Top universities charge the highest fees. But student loans come to your aid here. Whatever is the total cost including tuition fees, books and maintenance loan, you’ll repay a fixed amount every month depending on what you earn over and above £25,000 in a year. So much for branding! Keep in mind that the more money you borrow the more number of years you’ll be repaying it.
  • Student Loans for Living Costs:
    If your university is in another city, you’ll have to move and likely put up by yourself in the new city (in cases where hostel facility is unavailable). This is called living costs and includes food, books, travel and accommodation. You can get a loan for managing living expenses. They are credited directly to a student’s bank account in three termly installments. The amount of a maintenance loan depends on two factors- 65% guaranteed and 35% based on your parents’ income. So parents earning more are expected to fulfill this gap.

From the year 2016-17, full-time students above the age of 60 are eligible for maintenance loans. Students in the technical education field (construction, digital skills and social care) are eligible to apply from 2019-20.

  • No Record on Credit Files:
    For almost every loan like a mortgage, credit card or car loan, lenders assess your credit file for your credit history and credit score. This file contains all the information about the credit dealings you’ve had in the past and how you managed them. Student loans are not recorded on credit files, so there’s no risk of a bad credit score. Lenders will get to know that you have student finance only if you choose to tell them.

Long Term Loans Guide

Long Term Loans Guide

These days, many UK citizens are taking loans for various purposes. It may be to finance a new house, a new car, pay for their education or even their wedding. Most people don’t have enough money in their current account to directly pay for their purchases upfront. Hence, they prefer to take loans from lenders like banks or building societies. There are many lenders who offer short term as well as long term loans with affordable interest rates. Long term loans are a great option to invest in assets like car or property as their duration is of 20 to 25 years.

 

What Are Long Term Loans?

When you borrow money for any purpose, it is called a loan. And loans that have repayment duration of more than one year and less than 30 years are known as long term loans. This duration is specific and spread out for a larger number of years. The interest repayments are also likely to be the same over the loan term. This allows for budgeting. That means you know how much you pay in principal and interest payments every month. Not only individuals but also businesses can take these loans for their working capital assets like buying assets, inventory and equipment.

 

Can I Get a Good Deal If I Have a Good Credit Score?

Yes, there are high chances of getting a great deal if your credit score is desirable. A great deal means a high principal amount and a low interest rate. Every lender will check your credit file for your report and score. Those who have poorly managed their finances in the past usually have a poor credit score. If you belong to this category, getting long term loans for bad credit may be your one and only option.

long term loans

What Types of Long Term Loans Can I Borrow?

Banks and building societies offer various types of long term loans for different individual’s needs. So there are loans you can borrow for a home, car, higher studies, wedding, business and also home improvement. Let’s understand each of them in detail…

  • Home Loans:
    Home loans are an easy way to finance your first or second home. There may be two scenarios here- you’re currently living on rent and want to have a house of your own or you already have a house and want a second one to earn income from it. We’ve seen that mortgage (a common name for home loans) is more commonly taken out by people for a first home. The process of mortgage goes this way. You first look up properties on sale and get in touch with the seller. You finalise a property and pay an upfront deposit of 10%. Then you apply online for a mortgage for the remaining amount. Mortgages are typically given for 25 to 30 years. This gives you enough time to repay the huge debt you’ve undertaken. In most cases, home buyers borrow for 85-90% of the value of the property. This concept is Loan-to-Value (LTV). One thing to remember is that home loans are secure with your house as collateral.

 

  • Car Loans:
    After home, the second life goal for most people is owning a car. If you don’t have money to buy a car off the showroom outright, you can opt for various car finance options like Hire Purchase and Personal Contract Purchase. You can also take long term loans from one to seven years. Some loans are secured against your car while others are not. It’s always better to take an unsecured loan as you don’t run the risk of losing your car if you default on your payments.

 

  • Startup Loans:
    Entrepreneurs who wish to set up or grow their business within the UK can avail startup loans from the government. Some private lenders also lend loans to young organizations. When a business is just starting out, it may not possess the required amount of funds. Money needs to be paid for rent, salaries, power and utility, sanitation, etc. So a business can take long term loans and repay it as and when they get a foothold and profits start coming in. Startup loans are unsecured loans. A businessman doesn’t need to have any assets and doesn’t need to raise money through the issue of shares.

 

  • Student loans:
    Those UK citizens who wish to pursue higher studies and don’t have the financial means can opt for student loans. Student loans are offered by the government and enable access to top universities which otherwise wouldn’t be possible. Typically, they are long term loans that help to pay college and tuition fees. Disabled students and parents are eligible for some extra money over and above the regular amount. A student doesn’t need to worry about repaying the loan while studying. He or she has to pay it only once they get a job and start earning. That too, how much they’ll pay depends on how much they earn and not how much they owe.

 

  • Wedding Loans:
    Even if both partners are working, it can be difficult to save enough money for a grand wedding. In contrast to old belief, a lender can help you celebrate this one of many happy occasions without worrying about the cost. Most weddings can cost upto £25,000 so you can borrow if you’re short on money. You can pay back the long term loan over a period of five years and request a payment holiday for a few months following your wedding.

 

Can I Get A Long Term From You?

Yes, we offer long term loans specially designed for people with a bad credit score. We understand how tough it is to find a lender in such cases. Your application is either refused or you get an unfavourable deal. We eliminate both these issues and also a credit check. Thus, you can approach us anytime and our team of advisors will get back to you with a tailor-made deal.

 

What Benefits Can I Get From Long Term Loans?

Long term loans have quite a few benefits.

  • Higher Borrowing Limit:
    With a long term loan, you can borrow a huge amount of funds, as high as £300,000. Coupled with flexible repayment options and a fixed time limit, these loans are useful to give your home a makeover, manage your wedding expenses and more.
  • Lower Interest Rates:
    The interest rate and APR remain low due to the longer term of the loan. Interest rate and other fees combine to form the Annual Percentage Rate (APR). The APR is different for each individual or business depending on collateral used, guarantor or no guarantor loan, credit score of the borrower and time span of the loan. Also, interest rate is fixed during the tenure of the loan.
  • Rebuild Your Credit Score:
    If you take out long term loans and repay it monthly on time, it shows good credit behaviour. Lenders send your repayment report to UK’s credit agencies every month. This helps rebuild a positive credit score.
  • Flexible Terms:
    If you can afford to pay more in every monthly instalment, you can choose a shorter term, say for 10 years. But if you want to save money and reduce your monthly outgoings, you can spread out the cost over more years.
  • Fast Loan Approval:
    No more going to a lender to submit your loan application! Everything can be done online. You can get a fast loan approval within 2 to 5 days.

 

What Risks Am I Taking With Long Term Loans?

The potential risks with long term loans are:

  • Collateral as Security:
    Long term loans need you to pledge your asset to get the loan. This acts as a safety net in case you default on your payments. If it’s 3 months since you made your loan repayment, the lender can declare you defaulter and sell your home or car to recover his money.
  • Guarantor Required:
    A guarantor is a person who assures that they will repay your loan if you are unable to. This may be a relative or close friend. Many traditional lenders refuse to give no guarantor loans.
  • Long Term Commitment:
    Any form of debt gives repayment stress and depression. You may lose your job and along with that your source of income. Ensure to have a back-up plan in place to pay your long term loan.
  • More Interest:
    It’s all well to opt for a 5-year loan instead of a 3-year one. But, you’ll pay more interest for a longer term loan. So choose wisely.

 

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Car Finance for Your New Car

Car Finance For Your New Car

Car Finance For Your New Car

Buying a car is a long-term investment as it’s an asset. Many people wrongly assume that they need to save enough before they can afford to buy their own car. The fact, however, is that more and more people prefer to finance their car by credit. You can bring home a car without buying it outright. Widely recognized and popular car finance options like Personal Contract Purchase (PCP), Hire Purchase (HP), Leasing and Bank Loan let you achieve this. Sometimes, depending on your financial circumstances, taking a car finance may not be the best thing to do. You should understand the different types in detail before making a decision.

 

Personal Contract Purchase

 What Is It?

The first and most popular car finance option is Personal Contract Purchase. The abbreviation for it is PCP. You can choose any car you like and start driving it. A car dealer will usually ask for an initial deposit amount as security for the car. This can be anywhere from 10% to 20% of the value of the car. For example, if your car costs £50,000, a 10% deposit will amount to £5,000. Note that you’ll have to pay this deposit from your own savings.

How Does It Guarantee Flexibility?

Personal Contract Purchase gives you the freedom and flexibility you desire. At the end of the Contract Agreement, there is no obligation on you to buy the car. You may return the car if it’s in good condition. Or you may even buy it after making a balloon payment. A balloon payment covers the unpaid price of the car. Another option is to buy the car at resale value and sell it to buy a new car.

How Does PCP Car Finance Work?

As with any other kind of loan, your credit score matters. Those with a good credit score are likely to get the best deals. The rest can only hope that they get lucky. However, some lenders know that bad credit is not forever and don’t consider it much. The lender won’t check your affordability- you’ve to do it yourself. First, you make a 10% deposit and then a series of monthly payments. You also have to use the car in a careful manner as fines may apply for excessive wear and tear. Sticking to mileage limits can prevent you from paying extra charges. At the end of the contract, you just return the car and don’t pay even a penny after that.

What Are the Upsides and Downsides of PCP Car Finance?

Upsides:

  • Lower monthly payments as compared to Hire Purchase car finance
  • Deposit amount is negotiable
  • Flexibility of contract term (usually 24-48 months)
  • No obligation to buy the car on expiry of contract
  • Early repayment is possible

Downsides:

  • Even after monthly payments, you get no ownership of the car
  • You have to pay for excess mileage
  • Penalty for wear and tear beyond normal

car finance

Hire Purchase

What Is It?

The second car finance option is Hire Purchase, short for HP. You should go for HP only if you are a hundred per cent sure that you want to buy the car. HP is just like a mortgage for your house. You pay an initial deposit and borrow the rest to buy the car. You then pay off the car loan in small instalments.

How Does HP Car Finance Work?

You usually pay around 10% of the value of the car from your own pocket. A finance company can then lend you 90% provided the car itself is the collateral. So it’s a loan against your car. In case you fail to make repayments, you can lose your car. But if you manage to keep up until the last instalment, the car will be yours. Note that there’s no option of returning the car at the end of the agreement. It’s a long-term commitment you take on.

What are the Upsides and Downsides of HP Car Finance?

Upsides:

  • The car is yours at the end of the agreement
  • The car loan term is longer (usually upto 60 months)
  • No fine for wear and tear
  • No mileage restrictions

Downsides:

  • You don’t get ownership of the car during the loan term
  • May be more expensive than a bank loan
  • Monthly payments are higher than PCP finance

 

Leasing (Personal Contract Hire)

What Is It?

Leasing is the third form of car finance. In this, there is no talk about buying the car. You just borrow a car on lease. It’s similar to renting a car while on a holiday. At the end of the agreement, you can neither buy the car nor will you have any ownership right on it. It’s a long-term rental.

How Does Leasing Work?

Like the other forms of car finance, you’ll have to pay a deposit but this is less flexible. Your deposit is likely to be calculated as a multiple of three, six or nine monthly payments. The contract agreement will state how much you need to pay monthly and how many miles you can cover. A Personal Contract Hire or Leasing already includes servicing costs and car tax, so you have to only worry about refueling the tank.

What are the Upsides and Downsides of Leasing Car Finance?

Upsides:

  • Fixed-cost motoring
  • You don’t own the asset so no worries about depreciation

Downsides:

  • Maintenance payments may burn a hole in your pocket
  • You can’t keep the car even if you want to
  • The deposit is relatively large
  • Mileage is limited
  • Penalty for excessive wear and tear

 

Bank Loan

A bank loan is a traditional form of car finance. You can borrow long term loans for bad credit as well if you want to buy a new car. With a bank loan, you can park a car in your driveway without worrying about limiting your mileage or returning it. It comes with fewer strings attached than PCP or leasing. You own the car outright so you can easily sell it to repay the loan in case the worst happens. Consider your incomes before signing a contract.

What are the Upsides and Downsides of Bank Loan Car Finance?

Upsides:

  • You own the car outright
  • You can get competitive fixed interest rates
  • A bank loan is easy to arrange over the phone
  • You can sell the car if you no longer need it

Downsides:

  • It can affect your ability to borrow more
  • A good credit rating gets you a good deal
  • You often have to pay off interest first
  • Bank loan rates vary

 

Choosing from the available types of car finance can be tricky. But once you know how each one works, you’ll find that it’s actually very simple.

 

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Personal Loan For Your Next Holiday

 

Personal Loan For Your Next Holiday

Personal Loan For Your Next Holiday

We all like to take a memorable holiday at least once in a lifetime. Be it going on a honeymoon or taking a world trip, travel puts our mind and body at ease. It’s not necessary that each one of us will have so much money saved up. And with exchange rates constantly fluctuating, we can’t really predict how much money we’ll need for our overseas trip. An easy way out here is to borrow. You can get a personal loan for holiday purpose.

 

What are Personal Loans for Holiday?

Personal loans are an unsecured type of loan. Individuals can take a personal loan for any purpose they want. They can use it in any way. There are no restrictions. A holiday loan is a loan that can sponsor the holiday you’ve been waiting to take. Though it’s generally better to use your own savings, every person may not have that kind of money saved up. And it’s perfectly alright.

 

Is it Worth Taking a Holiday Loan?

hings like a house or car. An intangibor tangibel rip without having to dip into your savings. It’r savings can be usedfic numbA personal loan does not require you to have an asset as collateral. So, even if the worst happens and you fail to make repayments, your home, car and jewellery will remain with you. These loans usually are of a fixed amount, have a fixed (and not variable) rate of interest and are borrowed for a specific number of years (which is short). A low rate holiday loan is an easy as well as convenient way to pay for your trip without having to dip into your savings. It’s wise to use your savings as a deposit for tangible things like a house or car.

 

Can I get a Personal Loan for Holiday Even If I have Bad Credit?

Yes. So many people are unable to take their loved ones on a holiday just because of a bad credit history. We understand that every UK citizen- irrespective of credit score- deserves a holiday. You’re trying to improve your credit history and we’re here to help. No more chasing behind high-street lenders who charge you high interest rates or turn down your application! We specialize in offering personal loans for bad credit. Don’t keep your loved ones and destination waiting. Just fill in our application form and get the loan approval within 24 hours. We don’t give so much importance to a credit check.

personal loan

How Much Personal Loan Can I Borrow For My Holiday?

The amount of personal loan you want to borrow depends on how much your holiday is likely to cost. The following factors may affect how much amount of personal loans you’ll need to borrow for your holiday trip.

  • Within the country or abroad:
    If you plan to travel within the UK itself, you may want to borrow a small loan. However, if you plan to travel to a destination in a foreign country, how much you’ll want depends on things like the exchange rate, cost of hotel bookings, entertainment options, etc.
  • Duration of your trip:
    A three-day overseas trip may cost you less than a two-week trip. The longer you stay in a foreign country, the higher the amount of personal loan you’ll likely need.
  • What you want to do there:
    How much you’ll have to borrow as a personal loan for your holiday also depends on your itinerary. If you plan to stay at a five-star hotel, go sightseeing and participate in activities and sports that are expensive, you need a higher holiday loan. Instead, if you plan to stay with your relatives and just want to shop and see places, it’ll work out much cheaper.
  • Number of travellers:
    Generally, the lesser number of travellers need lesser the amount of a personal loan. You may find- after your calculations- that as a couple, you need a small holiday loan than if you were a family with five members.
  • Destination:
    The destination itself affects how much personal loan you may have to apply for. This varies in tune with the exchange rate of the country you’re travelling to. For example, a country where £100 can pay for your hotel bills and travelling to five tourist spots is cheaper than a country where you have to pay £200 as hotel charges.
  • How much you can spare from your own savings:
    You’ll likely to use up a few hundred pounds from your savings to reduce the amount of your debt. However, it’s better to borrow a large sum of money. As you borrow more, interest rates fall and your debt tends to get cheaper.

For example, you can borrow a sum between £7000 and £15,000 over four years at an interest rate of 3%.

 

What is APR?

The Annual Percentage Rate (Annual Percentage Rate) is the rate at which lenders are ready to give personal loans. This refers to the interest rate plus any fees and charges you may have to pay. Remember that this is the representative rate that only 51% of all successful applicants will get. It’s like a deal that only the lucky get. The rest 49% will be offered a rate a bit higher than the headline rate depending on risk-based pricing.

Risk-based pricing is the percentage of risk you pose to a lender. If you’re a person with a history of poorly managed finances, a lender will offer you a higher rate for an unsecured personal loan.

 

Is My Credit Score Important To Get A Holiday Personal Loan?

Yes. As personal loans are unsecured loans, the lender is likely to run a credit search on your file before any further communication with you. Once you apply for a personal loan for your holiday, a lender will see whether you have a good or bad credit score. This leaves a mark on your credit file and shows the next lender how many you’ve already applied to. If you apply to too many lenders at once, it shows that you’re desperate for credit and can further deteriorate your credit score.

 

Pros and Cons of Holiday Personal Loans

The Pros

  • Your payments are fixed, making it easier to budget
  • You can spread the cost of your loan to reduce monthly repayments
  • You can take a payment holiday at the start of the agreement
  • There is no to little risk as they’re unsecured
  • The application process is simple and fast

 

The Cons

  • If you have a bad credit history, you may be refused a loan
  • Even if you get a loan, it may come only at a high interest rate
  • The high APR may make you think twice
  • You have to repay the loan even if the holiday is long over
  • Savings are essentially free
  • Debt means risk and if you don’t repay, your lender may take you to court

 

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How to Spot a Loan Shark?

How To Spot a Loan Shark and Stay Away From Them

How To Spot a  Loan Shark and Stay Away From Them

In today’s times, it’s easy to pretend to be someone’s friend and offer money when they most need it. In the UK, there are lots of people and families with a low income and a poor credit score. Obtaining long term loans from banks and building societies becomes difficult for them. That’s when they may fall prey to a lender who is helpful but is a loan shark in disguise. Falling prey to loan sharks is very easy as they seem to be like any other lender. But what you see is often not true.

 

Who is a Loan Shark?

A shark is a pretty scary fish. No wonder a loan shark uses the same analogy. A loan shark is a dangerous person or body offering loans at a high interest rate. They don’t hold an authorization from the local financial regulator, the Financial Conduct Authority (FCA) in the UK. Gullible and desperate people are the target for a loan shark. Such people are easy to convince as they don’t verify a lender’s credibility. They blindly trust anybody and everybody. This can be very dangerous in this age of fraud and trickery.

 

What Does the FCA Do?

The Financial Conduct Authority (FCA) is a financial regulatory authority based in the United Kingdom. It came into existence on April 1, 2013 and has its headquarters in London. The FCA does not work with the UK Government. It is an independent body responsible for regulating the conduct of the financial services industry. It regulates financial firms operating out of the country, provides services to customers and maintains the integrity of the financial market.

One of their important functions is taking steps to protect consumers from frauds of a financial nature. Any individual or firm with an objective to provide regulated financial services or credit facility must first apply to the Financial Conduct Authority (FCA) for authorization. Only on getting this certificate from the FCA can they accept deposits and give loans. Unauthorised lenders have to pay fines and can even be face imprisonment.

 

How To Spot a Loan Shark?

A loan shark has a clever disguise and that makes them tricky to spot. Finding out whether a loan shark is next to impossible in the early stages. But, if you look carefully, there are always some things that look suspicious. We are scared of loan sharks as they are the last people you should deal with, however badly you might need the money. You can follow these tips to beware of loan sharks.

  • If the website of a lender doesn’t have contact details, it means something is fishy. Every lender would have their email ID and telephone number mentioned on their website.
  • An authorized lender always has an FCA Authorisation number displayed on their website. Look for the License number of the firm.
  • If you’re unclear whether the firm is a broker or direct lender, it’s best to avoid them.
  • An important thing to be careful about is the URL of the website. Websites of genuine lenders are secure and have ‘https://’ instead of ‘http://’ in their URL. If it’s an insecure website, the lender may misuse any details you fill online.
  • If you’re a lender or broker approaches you with a loan offer, it’s best not carry on any further dealings with them. No broker or lender would approach you. You go to a lender when you need a loan, not the other way round.
  • Loan sharks offer no paperwork, for example, a credit agreement or record of payments.
  • A fake lender may refuse to give you information about how much you owe and what your interest rate is.
  • You may have to give documents like bank cards, driving license and passports as security for the loan.
  • If you’ve taken money from a loan shark, you may find your debt suddenly increasing. Additional charges, not told earlier, may also add at any time.
  • Even if you’re willing to settle your debt in full, a fake lender may not allow you to do it.
  • As long as you’re keeping up with repayments, all is well. But the moment you miss a payment, you’ll start getting threats. The loan shark may also turn up at your door and resort to violence.

loan shark

How To Check If My Lender is Genuine?

As per the norms of the FCA, every individual or firm offering financial and credit services to UK citizens needs to be authorized by them. The FCA is like a watchdog- monitoring the activities of the financial industry and the companies therein. The FCA keeps a list of all authorized lenders. You can check the FCA Financial Services Register online to see if your lender is genuine or fake. It’s best to do this before contacting a lender as it saves time, money and stress later on. If a particular lender doesn’t appear on the list, that means they aren’t authorized to lend money to the public. Don’t borrow money from them or let them into your house. It can be a risky thing to do.

 

Why Does a Loan Shark create Fear?

A loan shark is a dangerous individual to deal with. They are just out to fool people and make money out of them. Under the guise of lending money, they subject people to a lot of physical and mental harassment. They may not stick to their loan period and demand money whenever they want it. If you fail to pay, they may take away your jewellery or threaten to report you to the police. Loan sharks often fudge details of your loan repayments so that you end up paying more money than you owe. There have been cases of people resorting to prostitution and drug smuggling to pay the money a loan shark demands.

 

Loan Sharks and the Law

Loan sharks don’t have any legal authority to either lend or demand money from borrowers. Any lender who harasses you should be afraid of the law. Some loan sharks will tell you that you’ll be sent to prison if you don’t pay back their money. However, this cannot happen as the loan itself is illegally given. They have no legal right to recover the debt by law.

 

Reporting a Loan Shark

If you or somebody you know is being harassed by a loan shark, help is not far. You can report them to the police. The police will ensure that legal action is taken against them. Find out how to report a loan shark on https://www.gov.uk/report-loan-shark.

 

Alternative to Loan Sharks

If you have a low income or bad credit score and need urgent money, come to us. Beware of loan sharks! We are an FCA authorised lender and provide bad credit loans without a credit check.

 

Read more:
Getting to know savings account