It’s a core business belief of Loan Broker and our team here that no borrower should ever pay a fee to use our service. In fact, we believe that no-one should ever have to pay a fee to apply for a loan – after all, you pay interest on any loan you take out and we think that’s enough.
So how does the application process work and how do we manage to do it without charging the borrower any fee? The Loan Broker team takes you through the process from start to finish.
How much can you borrow with a loan?
It depends on the type of loan you’re wanting to take out. In this article, the Loan Broker team are examining the options available to you with payday loans and short-term loans.
Choose payday loans
With a payday loan, you can generally borrow between £50 and £1,000. However, loans above £500 are generally limited to borrowers who have a history with a particular lender so, if you apply for one as a first-time borrower, you’re likely to be offered less.
Payday loans are a unique type of loan where there is only one repayment date. When you make your repayment, you pay back the amount you borrowed and the interest you have all in on go usually on your next payday but, if not, within 35 days of taking the loan out.
Choose short-term loans
Short-term loans have become increasingly popular in recent years as people who used to take out payday loans look to spread their repayments over a period of up to 12 months. This makes the amount you pay back each time to the lender less than the amount that you would pay back all in one go if you’d taken out a payday loan instead. However, it’s important to know that the longer you take a loan out the more you’ll pay in interest.
Short-term loans tend to be for between £250 and £2,500.
Is a loan right for you?
Small loans like payday loans or short-term loans (sometimes called instalment loans) are a handy option if you need money quickly for an emergency but you can’t find that money from anywhere else.
Do you really need a loan?
Sometimes we think we need money but, when we step back for a minute and think about it, we realize that what we think the money for may not actually be an emergency. We realize that we can actually hang on until the next time we get paid and we can spend the money then.
If you intend to use a small loan to pay back other types of credit – like another loan or a credit card – you need help and you should not take any more money out because, within months, you’ll find yourself very heavily in debt with no possible way to pay the money back.
Please Google “debt charity help” straight away for advice and support.
Can you afford to make the repayments?
As with all types of finance, it’s absolutely vital to make sure you can pay back the loan before you take it out – falling behind on a payday loan or a short-term loan or defaulting on one can make getting credit very difficult for the next six years.
Are you becoming dependent on taking out loans?
Think about the times you’ve borrowed money in the last year or two. Would you say that the amount of debt you have has climbed up slowly during that time? If so, it strongly suggests that you need to take positive action to reduce your dependence on debt.
You need to budget – check out a recent article of ours on how you can set a budget for yourself and your household.
Applying for short-term loans
There are two ways of applying for short-term loans or payday loans – either directly with a lender or through a broker like Loan Broker. Later in this article, we’ll explain why we think to apply through a broker makes more sense but, for now, we’ll examine the application process.
The application procedure
When you apply for a short-term loan or a payday loan, the first thing you need to do is to fill out an online form. On the form, you’ll be asked about the money coming into your home (including your wages and any benefits you’re in receipt of) and the money you’re spending (including mortgage/rent, your bills, childcare costs, and so on).
You then press the “submit” button when you’re finished. At that point, and in accordance with the laws as laid down by the Financial Conduct Authority, your lender or broker will automatically contact one of the three credit reference agencies – Equifax, Experian, or CallCredit.
The lender or broker will then combine the details on your application form and on your credit report using that information to determine whether they’ll say “yes” or “no” to your loan request.
Are you eligible?
To be eligible for a loan, you’ll need to be 18 years or older, a resident of the UK, have a functional bank account (with a debit card), and either employed or self-employed. Applicants with County Court Judgments, IVAs, and so on will find it harder to secure a loan. Applicants who have been declared bankrupt may be disqualified from applying at all.
You don’t need to visit a branch to make an application – the whole process takes place instantly and online.
Why do borrowers apply for a short-term loan?
Payday loans and short-term loans are designed to cover emergency situations like meeting medical bills, car repairs, vital home improvements, and so on.
However, they are not the only reasons why people apply for payday loans and short-term loans – a quarter of applicants use the money for holidays or to treat themselves. One in ten of us uses them to buy presents and gifts for others.
Whatever the reason you want a loan, please make sure that you can make the repayments on time and in full.
Can I borrow money even if I have bad credit?
Yes. Loan Broker has established relationships with dozens of lenders who specialize in working with people whose credit history is not perfect. You might be surprised how many companies we can contact on your behalf to help you and how competitive the bad credit loan sector is.
I don’t have a guarantor. Will that be a problem?
No. Loan Broker believes that guarantor loans are unfair and, as a result of our belief, we don’t represent companies offering them. For us, they present a real danger to borrowers’ relationships with friends and family members (the people most likely to be nominated as guarantors). Come to us first – we’ll try our very best to find you a great deal with no need to put your friend or family member at risk of paying back a loan that they have got absolutely no benefit from.
What are the major benefits of taking out a loan through Loan Broker?
With so many lenders out there, it’s difficult for a borrower to know who to approach. That’s very important because each lender has their own “borrower profile” – the type of person they feel happiest lending money to. We know each of our lenders’ borrower profiles meaning that, when we get your application form details and when we examine what’s on your credit file, we know exactly which lenders to present your loan request to. It saves you a lot of time and money by working with us.
Does Loan Broker charge an upfront fee?
No – we will never charge for our service to borrowers. Always beware of companies offering to find you a payday loan or a short-term loan but for a fee.
All reputable brokers, like Loan Broker, are paid a “thank you” fee every time we successfully bring a borrower and lender together. Think of it this way – we only get paid by a lender every time someone takes out a loan with them. This gives us a massive incentive to present borrowers with the very best loans we can find.
How to apply for a loan with no upfront fees through Loan Broker
It’s simple – start by applying here. You should hear back within seconds of submitting your details whether you have been accepted for a loan or not. If you have been accepted, we’ll give you all the information you need on costs, interest rates, and repayments so that you can make an informed decision that’s right for you and only you.