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Looking into Personal Loans in the UK

Sometimes, getting the right loan can be a difficult and complicated experience. With a range of different personal loans currently available on the market to choose from, finding the best solution to pay for the things that you can’t quite afford by yourself is a matter of choosing from the best deals available to you. In this article, we will look at some tips that might help you to find a personal loan that best suits your specific needs. Remember, there are dozens of different types of lenders across the UK that offer personal loans – from building societies to traditional banks, and more!

Remember, getting the right personal loan isn’t just about going with the first location that is willing to offer you the amount of money that you need. You also need to think carefully about the APR and interest rates involved so that you can avoid paying excess fees in the long-run.

Who Provides Personal Loans in the UK?

In the United Kingdom today, you can go to more than just a traditional bank or building society if you’re looking for someone reliable to lend you money over a long, or short-term period. While high street banks and building societies remain to be the traditional way of taking out a personal loan – and perhaps the best option for those who enjoy working with familiar brands, they’re by no means the only solution. If you want to be able to drop in and speak with your lender at any given time, or chat with someone about your financial concerns, then a bank or building society could be the best solution, as there are often local branches available. However, remember that a bank that is located on the high-street is more likely to charge extra in interest when compared to an online bank.

If you’re willing to try something a little different from the standard bank or building society experience, then you could always consider borrowing from post offices, shops, and supermarkets. There are now a range of these loans available in the UK, and many of them offer their own unique financial products. This is often very useful to people if they want to combine various purchases with also shopping for a personal loan.

Online banking is yet another solution for individuals in search of a reliable personal loan. With online banking, you can benefit from the fact that the lenders are giving you cash with lower overheads. Usually, this means that the reduced costs allow lenders to charge you much less for the personal loans that you want. In fact, some of the lowest rates around can often be accessed from online banks. As well as having the convenience of banking online, you should also be able to phone the loan company that you are working with at any given time if you are worried about your financial situation or you simply have questions to ask about your loan. Another significant advantage of banking online is that you don’t have to be nearby to a local branch to check up on your loan.

Lending and Borrowing Exchanges

One of the things that you can consider if you are looking into the options that are available to you regarding personal loans, are borrowing and lending exchanges. These financial devices work similarly to a co-operative in that they can offer most people lower-cost personal loans with small interest rates. Lending and borrowing exchanges are useful to people who would prefer to cut out the middle man involved with lending, which also reduces the extra costs that often make lending from a high-street bank so expensive. In simple terms, people lend and borrow from each other directly.

The lenders and borrowers start by entering into a legally-binding contract with the people that they will be working with over the term of the financial agreement. The exchange system them makes sure that monthly repayments are collected consistently and on time. If the money that is owed is not paid on time, then these systems will make use of the same sort of recovery processes that you would generally expect from a standard high-street bank.
In order to help reduce the risks that are available to the people that are lending money across the country, borrowing and lending exchanges ensure that the amounts that are borrowed are spread across a range of people – usually more than fifty at a time.

Find the Right Personal Loan

Remember, finding the right personal loan is an experience that’s likely to be unique to you. Make sure that you don’t simply jump into the first offer that you are given. Take the time to shop around and see what is available in terms of offers and interest rates in your local area, and online.

What are Your Options With Small Loans?

Sometimes, just because you’re a little short on cash – doesn’t mean you want to get yourself into a huge debt with excessive loans. Many people find themselves in positions wherein they only require a small loan to help them boost their balance and pay for an essential item. However, many customers find that they struggle to not only find the right small loan for their needs, but ensure that they’re getting the cheapest option in terms of interest rates and more.

In this article, we’ll be taking a brief look at some of the best solutions for small loans, from unsecured options, to credit cards, and various other choices that you might not have considered when it comes to giving you that extra boost of cash that you need. With a little luck, one of the following solutions will help you to get your hands on that cash you need, without having to spend a huge amount on obscene interest rates.

Small Unsecured Loans

In some cases, you may find that you’re capable of applying for a small, unsecured loan. These are simply small amounts of money that you borrow without having to place any collateral up to keep the bank safe. Of course, your chances of getting a small unsecured loan will balance largely on exactly how much you want to borrow, and what your average credit rating looks like. While some borrowers will give minimal loans, you may find that the amount you want to borrow comes with an extremely high APR.

With a little comparison shopping, you may discover that some other lenders will give you small amounts of money for rates that are more competitive – but these providers may only be willing to go as low as £1000 on their offers, while others can go as low as £250. Deciding if an unsecured loan is the right option for your needs is right for your needs will depend on how much you need to borrow exactly, and what deals are available at any given time for that amount.
Remember, no matter where you go, if you want to borrow through an unsecured loan, you will need to have a good credit rating. The nature of an unsecured loan means that many lenders want to look for ways to minimise the risk that they have to take on as much as possible.

Payday or Short Term Small Loans

For some people, payday loans seem like the ideal option for small, short-term access to cash. After all, these loans allow you to access a small amount of money for either a few weeks, or a few days until you are next paid. Unfortunately, payday loan companies can charge a great deal in terms of interest rates, which could mean that you end up getting yourself into quite a lot of debt. Fortunately, the Financial Conduct Authority have taken some steps to reduce the unfairness of these loans by capping the interest rate at no more than 0.8% per day.

Even though you cannot pay as much interest as you once may have on payday loans, the truth is that these options should often be used only as an emergency option when there are no other choices available to you. If you can look elsewhere for a small loan or borrow your money using a different strategy then it’s usually best simply to do this.

Getting a Small Credit Card Loan

If you have a credit card, then you may be able to sort your small loan needs out very easily. Using a credit card to get your hands on a little extra cash can be incredibly cost effective, particularly if you use your card wisely. Remember, there are a wide range of different credit cards on the market today that offer 0% on some purchases and if you pay the amount of money you borrow during your period for interest-free spending your little loan will not cost anything at all.
Just remember that in most cases the 0% rate will only apply to the purchases that you make with your credit card. This means that you can’t simply withdraw cash – you need to use your card to make the purchases you need. Alternatively, if you cannot pay off the balance that you borrow during your credit card period you might be able to transfer the balance owed onto a 0% balance transfer card, and this will often mean paying a transfer fee, but your small loan should remain interest free for a longer period of time.

Another option is to use a money transfer to get access to extra cash from your credit card. Some credit cards will offer transfers that are free from fees to your current account, and all you need to do for this is pay a small handling fee.

What are loan sharks and are they still around

Taking a loan for the first time can be quite confusing for people from all around the world, as the process requires a multitude of documents, alongside with a bit of time to get everything set up. At this moment in time, many people choose to consider loan sharks, rather than banks for various reasons. For those who do not know, the term of loan shark can refer to either an individual or company that offers loans at considerably higher interest rates.

Surprisingly, upon hearing the term, many people tend to believe that it only refers to illegal lending and borrowing, yet this is not always the case. In terms of the illegal loan sharks, they are known to enforce repayment by making numerous threats of violence, blackmail and more, especially in the criminal underworld.

Loan sharks in history

To put things better into perspective and understand more about the concept, loan sharks initially appeared back in the 19th century, in the United States. As the low legal interest made loans quite unprofitable, and that short-time lending was frowned upon by the society, numerous loan sharks appeared to take on this business that most banks and other financial institutions chose to stay away from. However, most loan sharks at that moment in time carried out their activity illegally, and offered short-term loans with very high interest rates, which people still bought due to having no other choice. A few decades ago, loan sharks presented themselves as official and registered agencies, operating out of actual offices, and who were willing to offer loans without credit checks, yet chose violence in case the debts weren’t paid back on time. Their way of operation also included making clients sign a wide variety of contracts that seemed legitimate at first, but which were actually, of no actual legal value at all, and would only be used to blackmail clients into paying the debt back. However, their way of operation was quite smart, considering the fact that the size of the loan alongside with the repayment plan depended based on the borrower’s means, which meant that they would not lose funds, and continue gaining profit through the extremely high interest rates which were charged.

Back in time, the legal penalties for being a loan shark and offering loans illegally were quite law, as the usual penalty was forfeiture of the interest, and sometimes, of the principal as well. Loan sharks weren’t susceptible to jail time or massive fines, thus making the job seem like a great chance to earn some money for people who already had capital.

Loan sharks today

As time passed, better legislative framework was put into action, thus requiring all loan agencies to sign up, and follow a set guideline of laws. Failing to respect them leads to massive fines, and also potential jail time for the people implicated in the action.

Unfortunately, some people tend to consider payday loan agencies as the new loan sharks, yet this is false. Payday loan agencies operate under strict regulation, and would never resort to violence or threats in order to make clients pay up their debt. They are far more professional, thus becoming considerably more trustworthy as well. In case you do not know, the payday loan market has exceeded a few billion dollars all around the world, and is worth a few million as well in the UK.

In terms of the actual loan sharks, they are still around today, especially in the criminal underworld, and still resort to some of the tricks present in the past. However, their freedom of operation was drastically reduced, with law enforcement agencies actively trying to eliminate all loan sharks from society. Some of today’s loan sharks are known to have mafia-ties, and also be dangerous, especially in regions where the concept remains unregulated by the government.

However, in the UK, the chances of having to deal with a loan shark are quite small, considering the government’s activity in the region. Most payday loan agencies operate legally, and strictly follow their legislative framework, so the chances of dealing with an illegally-operating agency are quite small. Regardless, it’s still best to carry out your research, read reviews, seek recommendations, check the payment plans, their terms and conditions, and use this information when it comes down to deciding whether to borrow from an agency or not.

Additionally, if you’re looking for a higher, or long-term loan, then you might want to consider banks, as they have better plans for this type of loans, regardless of the eligibility requirements being considerably higher.

Based on everything that has been outlined so far, the presence of dangerous loan sharks has been lowered in today’s society, and payday loan agencies shouldn’t be confused with these individuals or phantom agencies.