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All You Need To Know About Low Interest Loans

In this article, we will discuss all the different types of low interest loans so customers can make an informed decision on which type to get.

Low-Interest Loans Direct Lender

Are you running out of cash but you don’t want to pay expensive loans? Do you need money to fund urgent expenses? Are you looking for a cheaper loan alternative that can help relieve your financial crisis? If yes, then low-interest loans are one of your options.

So what is a low-interest loan?

A low interest loan is a type of loan, payable in one lump sum or instalment basis, that has a low Annual Percentage Rate (APR) than the usual. It is easier to settle than those debts with exorbitant rates. When looking for a cheaper credit, there are two sources to choose from – a direct lender and a loan broker. Choosing a low-interest loans direct lender makes a huge difference when it comes to the fees and the application process itself. However, it’s still worth knowing the pros and cons of each option.

A low-interest loans direct lender may be a bank, mortgage bank, or a private lender. As long as their employees are the ones who handle and review your loan application and make the direct decision, then it is considered as a direct lender. A licensed direct lender is regulated by the state and federal agencies and operates the business legally, thus it is reliable. It is a one-stop shop since you’re dealing with the direct source of the loan. Although they charge various fees, it is cheaper than the other source because they don’t carry any commission fees, application fees, and the like. Above all, they process the loan faster because they don’t need to wait for somebody else’s approval. However, your options are limited since they offer the same products and services.

A mortgage broker, on the other hand, gives you a variety of loan programs and lenders. They also provide assistance in choosing the right lender that would fit your circumstances. Loan brokers do not easily reject anyone; in fact, they are most likely to accept your application as long as you meet their basic requirements. Although they may charge a commission fee, they can offer a more favourable loan rate, helping you save money. They may also help you save time by reducing the effort spent on shopping different lenders. However, borrowers should be aware of the broker’s terms and conditions. Beware of any hidden charges that they may apply to increase their profit.

Getting Low Interest-Loans With Bad Credit

Nowadays, almost anyone can get a loan despite the bad credit. However, borrowers have to meet the lender’s criteria to ensure their approval. Otherwise, they will be rejected regardless of their credit rating. Your source of income is one of their criteria that could make or break your application.

Aside from fulfilling the requirements, there are also techniques that can help increase your chance of getting approved. One of which is asking for a lower amount. The lender may think that you can settle the loan easier because of the small amount. You may also check your credit report to see that there are no inaccuracies with the data entered and you’re not a victim of identity theft. If you find any discrepancies, consult the credit bureau immediately.

Meanwhile, the basic requirements involve the following:

  • Age – You must be 18 years old and above
  • Proof Of Income – You must have a stable source of income
  • Collateral – You may pledge your home, car, or jewellery (Optional)
  • Proof Of Residency – You must be a UK resident or citizen
  • Bank Account – You must provide the details of your working bank account

Low Interest-Loans UK: Tips For Searching Low-Interest Loans Instant

There are three ways to get a loan – by visiting the lender’s office, through a phone call, or via online. No matter what option you choose, you must consider these tips to find low-interest loans instant:

  1. Check out different consumer loan that offers the best deal

Search for various low-interest loan lenders and compare their rates, policies, and payment terms. Consider which one works for you and find out which fits your needs. Thoroughly check their company details and the feedback from their past clients.

  1. Take only what you can afford

No matter how attractive the deal is, do not be tempted to over-borrow. Even if you can handle the monthly loan amount, you need to consider if the interest rate and other charges are worth paying. Meanwhile, borrowing more than what you can afford can lead you to more financial trouble.

  1. Be careful with automatic debit/withdrawal transactions

When borrowing a loan, the lender may ask for your bank details and the access to your account. This is done so they can automatically withdraw the repayment from your bank account. Be careful though as some lenders may get more than what you’ve agreed for.

Low-Interest Loans Guarantor

If you want to find a cheaper loan, you may rely on a second person. The guarantor, who will act as the cosigner, will vouch on your behalf and guarantee the loan. This gives you a chance to have a successful application and a lower interest. The other person can be anyone – another family member, a friend, or an officemate. However, before you find a low-interest loans guarantor, be sure that both of you (borrower and guarantor) understand your role and liabilities.

Low-Interest Loans No Guarantor

In case you can’t find a guarantor, your other option is to look for low-interest loans no guarantor. Some lenders may ask for collateral in exchange for a low interest rate. This means pledging your assets, such as your car or home. Choosing this loan is ideal if you want a bigger amount as well. However, you need to face the consequence – losing your property. If you can’t repay the loan, the lender has the right to repossess your property, put it in the market, and use the money to repay the original loan amount, interest rate, and the additional charges applied.

Representative 305.9% APR.
Representative example: £400 borrowed for 90 days.
Total amount repayable is £561.92 in 3 monthly instalments of £187.31.
Interest charged is £161.92, interest rate 161.9% (variable)

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


FinanceJar is a credit broker and not a lender. We pass your information to a lender once you have been accepted for a plan. We take a fee from the lender only, once you’re approved and we do not add charges to your plan in doing so.