When it comes to borrowing money, you may think that your bank or building society will be best for you. After all, you would have been banking with them for many years.
The way in which we borrow money is changing, with more specialist loan providers to help different groups of people. You may find that these providers will serve your individual needs better than a more generic loan provider.
However, with all these options, you could be left confused to which loan provider is better for you. There are a number of different specialist loan providers that you may want to consider. Of course, this is entirely dependant on your background, your work status or where you live.
This guide will show you the loan providers which could be best for you, dependant on your circumstances.
You may have been banking with your chosen bank or building society since you were younger. You may have switched banks or building society more recently. Either way, both will have a good record of your account activity. This will include your income and expenditure and spending habits.
Most banks and building societies will have a number of different loan rates; however they tend only to advertise the best one. This is because they will match a loan rate with your finances and credit score. Score well and you will receive a lower interest repayment rate. Score poorly and you will have a higher loan repayment rate or may be refused the loan altogether.
Specialist Loans: Moving Away From the Bank
If you are an active member of the armed forces, you can take advantage of a specialist armed forces loan. There are a few specialist providers of armed forces loans, which you can easily find online.In some cases, the armed forces loan provider will secure the loan against your property, much like a mortgage.
This image has been sourced via Tax Credits
Pay Day Loans
They have come under some bad press over recent years. In the main for their very high-interest rates / APR and how they treat their customers. They do have advantages, but must only be used for very short term loans. Think days, rather than months.
Historically, these have been associated with trade unions and other common communities. However, they are attempting to widen their reach.
If you are a member of a trade union, you should find getting access to the associated credit union relatively easy. The credit union will offer a number of different loan solutions. This may include one that will assist with mortgages. Even if you are not a member of a credit union, you can join up. There are around 500 credit unions operating in the UK that you can join.
Choosing the Right Loan: Responsible Lending
Picking the right loan provider may require some shopping around. First of all, you must consider your circumstances. What financial position are you in today? You also need to think about how you have managed your finances historically. Remember, these will show up on any credit score that is run against you.