This month’s blog is about borrowing money without going broke and getting yourself into a whole world of trouble in the process. Badger Loans shows you how to make borrowing work for you.
It can be an emergency expenditure or an imminent need that must absolutely be met. Such as a broken boiler. Or to repair your car. Or maybe purchase a new one!
Usually, when you borrow money, you need to provide one main thing. Security. Security is generally for secured loans which are secured on a property or other tangible asset which can be repossessed and sold by the lender if you fail to pay the loan back. Our focus will be on unsecured loans which are also known as personal loans.
These days it’s also possible to provide the lender with a different type of security called a guarantor to guarantee the loan for you. The guarantor is a promise to the lending institution that in case you fail to pay for the loan, the guarantor would cover the loss. In simple words, you are giving the lender a friend or relative as security! In this case the loan is assessed on the guarantor’s ability to repay both your loan and any personal debt they also have.
Which brings us neatly back to unsecured personal loans. Take out your personal loan for under a year and borrow less than £1,000 and you can call it a payday loan or short term loan. It’s still an unsecured personal loan and nothing else has changed about it but it’s now also called a payday loan. Clever eh?
So that’s the main thing a lender will look for in a borrower first – do they have any security? If they don’t have it they move on to looking at your credit score.
Credit Scores
Your credit score is a credit reference agency’s opinion of your capacity to buy goods or services and your likelihood of repaying on time and without issue. Your score will have been built up (or down) over the course of your life of buying items on credit. Or having an overdraft from your bank or buying something from a catalogue. All these things go into the mix of your credit score alongside your ability to repay your monthly commitments like your mobile phone bill and your monthly electric bill. All the regular things you spend money on will have an effect good or bad on your credit score. So of course, you need a good credit score to get a loan. Right? But tell me one thing. If you really had a really good credit score would you really need a loan?
Presumably the answer to that question is a big yes because your need to borrow money hasn’t changed. The best thing a really good credit score will do for you is lower your interest rate because you will be perceived as a good risk and therefore likely to repay in full and on time. The trouble is most of us don’t have a really good credit score for one reason or another. And it’s not always our fault! Therefore we have to shop around with our less than perfect credit score determined by a computer algorithm and these days shopping around can take quite some time and come with a variety of risks.
Never Rollover!
This is where most people can fall into the vicious cycle of getting loans from shady people. The circle of exponentially high interest rate keeps you caught in. You keep trying hard. Work extra shifts. Yet the debt seems to keep piling on!
Here is how you make borrowing work for you. Without tying yourself in the never ending shackles of a series of debts. Get an unsecured loan from a reliable financial broker like Badger Loans.
And here’s the biggest tip of all which you simply won’t find on site’s like ours and that’s this: never ever take out more than one loan at a time from the same provider. Always repay your initial loan first and don’t fall prey to the offers of more money when you’re only halfway through your first loan.
That is how you get caught in the debt cycle each and every time so before you know it you’re repaying £100 a week on 4 loans and have no way out other than to go bust. No thanks and there’s no need to if you just keep it simple and pay for one loan at a time.
Here at Badger Loans you can apply for a personal loan as well as a payday loan. Both come under the banner of unsecured loans wherein you don’t need a great credit score or a guarantor.
For payday or short term loans, the term is under one year and you can borrow an amount anywhere between £100-£5,000. For personal loans, the term would be over one year and amount between £5,000-£25,000.
Real Deal
Now comes the part about ensuring the lending institute is authentic. Ask them explicitly if they charge any fees either up front or during any part of your loan process. If the answer is yes, run for the hills.
An authentic broker or lender would never charge you ANY fees upfront or during the loan process. That is a big red flag.
Also, keep your eyes open to how the company is behaving AFTER you have expressed interest. Are you being pestered with calls? Another red flag. Reputed companies do not call their customers. They are 100% online.
The last and the most important step is to check the company is licensed by the Financial Conduct Authority. They should display their FCA number clearly and explicitly like ours is here.
That’s all folks!
If you are following these steps, you are good to go!
