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Key Information

  1. Criteria
  2. Borrowing money - what should I do?
  3. Charges and fees
  4. Credit Ratings - How Do They Affect Me?
  5. Struggling to Maintain Payments
  6. What is APRC?
  7. APRC Example
  8. Commissions

 

Criteria

To be eligible for a loan you will need to:

  • Be a UK Resident
  • Property loan is secured against must be UK based and owned for a minimum of 3 months
  • Be over 18 years old
  • Be in permanent employment, receiving a pension or disability benefit/living allowance
  • Meet the lenders criteria and credit affordability assessment

Borrowing money - what should I do?

You should only apply to borrow money through a loan or any other means if you absolutely need to and do not have any alternative sources of funding. If you do need to take out a loan, you should think carefully about how much you need and the long term cost of making loan repayments before you commit to any borrowing.

Think carefully before securing debts against your home. Your Home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it.

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the term of the debt and increasing the total amount to repay.

Charges and fees

Some lenders may charge up-front fees when you take out a loan with them and these charges should be factored in to the cost of the loan. In some cases fees and charges may be added to the loan, but you should be aware that in such cases these will attract interest charges, which could significantly increase the overall cost of the loan.

Late or missed repayments will also impact negatively on your loan. Apart from lowering your credit score, the lender may also apply additional charges or penalties to the loan. These will usually be added to the loan and, as with any other added fees, will attract interest charges over and above the amount of the penalty itself.

Credit Ratings - How Do They Affect Me?

When a credit agency assigns a rating to someone, they'll take into account a range of information, including past credit history. The final rating assigns the person a certain number that a creditor can then use to determine their risk of defaulting. How a creditor interprets those numbers, however, is up to them. They are not required to accept or deny a loan application based on credit ratings alone.
It's important not to reduce the process of applying for a loan to good credit and bad credit. A creditor can take into account a range of factors - while one direct lender might reject a person for having less-than-perfect credit, another creditor might accept their loan application. There are no "good credit loans" or "bad credit loans," just a range of creditors willing to accept different levels of risk. However, people who have less favourable credit ratings tend to pay more for credit. For example, interest rates for people with lower credit scores may be higher than those with higher credit scores.

Struggling to Maintain Payments:

If you are struggling to make repayments on a loan you should contact your lender right away. You can also get free advice from debt charities like Stepchange, Citzens Advice Burea and the National Debtline

Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk

What is APRC?

APRC stands for Annual Percentage Rate of Charge and is used within financial services to help customers compare the total cost of borrowing between products they may be considering. The APRC given on a loan will include the whole cost of the borrowing, including any charges, upfront fees etc. 

The calculation of an APRC is complicated though the important thing to remember is you need to compare one loan carefully against another - for example the same term and loan amount as these will change the APRC significantly. 

Another important factor is your actual repayments and clearly they can be compared with other offers of finance, subject to weighing up other factors like default charges or the way interest is calculated. We are here to help of course so please ask us if you are unsure about how any of these figures affect your loan.

APRC Example

Representative APRC 10.4%

Borrowing £30,000 over 180 months with a variable borrowing rate of 7.7% above bank of England base rate. Paying 180 monthly instalments of £321.36.Total amount payable £57,844.80 comprised of loan amount (£30,000); interest (£23,599.80); broker fee (£3,750); lender fee (£495). This would result in an overall cost of 10.4% APRC.

Commissions

Cheap Loans act as a broker not a lender and receive a fee for introducing you to a broker / lender. Information regarding commissions can be disclosed upon request.