Alternative Types of Loan

What type of loan do people search for?

In the world of financing, there are many different types of loans. Whether you have taken out a loan before or you’re considering taking out your first, it’s always a good idea to be clued up on what to expect. When you take out a loan, you agree to borrow a fixed amount of money which you will repay in equal amounts. Of course, you will have to pay an interest rate on top of the loan amount, which we’ll cover in this guide. Before taking out a loan, make sure you have a thorough understanding of loan types and whether you are eligible.

Loan questions:

At The Money Shop, we work with a panel of lenders who cater for most circumstances. We recommend taking the time to review the terms and conditions of the various options to ensure you find the best solution for your needs. Whether you’re looking for a personal loan or a payday loan, you should always borrow responsibly and never rush into the process.

Sometimes, you may find a suitable alternative to a loan. There are many options if you want to borrow money, such as bank overdrafts. Be aware that taking out a loan can have implications on your credit score, too. If you’ve never taken out a loan before, always gather all the information you need surrounding the different loans. As you’ve probably learnt with this guide, there are many types of loans, and some may not be suitable for your needs.

We offer access to a range of loan options to our customers, including guarantor loans. If you’ve never applied for a loan with us before, we can help you identify which financial service is best. We’re chosen by first-time and returning customers due to our dedication and flexibility.

Visit our website today to learn more about the types of loans available and begin your application process. Our customer service team is dedicated to answering any additional questions you may have along the way.

If you want to take out a secured loan, you will also need to present your credit history. This is fairly standard for anyone looking to take out a loan that a friend or family member does not give. Secured loans are generally for larger amounts of money. You’ll normally be able to borrow anything from £5,000 to £100,000 if you can secure your loan with your property.

Remember that it will always come with a risk if you choose to take out a secured loan. The lender will have the right to repossess your home should you not meet the repayment agreement. Loans taken out against your car value are widely known as ‘logbook loans’. There are also ‘pawnbroker loans’ where a lender will accept valuable items, such as jewelry, as an asset to secure your loan.

When you apply for a guarantor loan, your nominated guarantor will need to provide details about their income and credit history. Some guarantors may be rejected if they do not meet the criteria set out by the lender. Usually, a guarantor will need to be on a higher than average income or has an excellent credit history. The likelihood of them being accepted as a guarantor will also increase if they’re a homeowner, for example.

You will be required to pay a higher than average interest rate on a guarantor loan, though this will vary from lender to lender. Typically, the interest rate will be between 40% and 50%.

Before you take out a loan, you should have a clear idea of what to expect and the repercussions if you cannot meet repayments. Many people taking out a loan for the first time should be made aware of the following:

  • Representative APR: When you are looking for a loan, be mindful of the APR. Most of the time, these rates are only offered to around half of those who apply and are successful. You will have a higher chance of being offered the advertised APR the better your credit history is.
  • The loan’s term: Applicants can choose to repay less each month if they apply for a loan over a longer term. This means that you are spreading your payments further, though you will pay back more in interest.
  • Payments: You should definitely assess whether you can comfortably make the repayments tied to the loan you’re interested in. Many people can inadvertently get themselves into further debt when they miss payments due to interest and late payment fees.
  • Loan amount: We never recommend taking out a high loan if you cannot afford to pay it back. While this may seem like common sense, many people take out higher loans when offered them. Remember why you are taking out the loan and the implications of failing to make payments on time.
  • Additional charges: Be aware of any administration fees tied to the loan you are taking out. You will need to factor in these charges, where applicable, regarding affordability and late payment fees and early redemption penalties.