Cash loans are the foundation of today’s economy. GDP is not driven by savings at all, but by consumption. And the driving force behind this consumption is loans. Thanks to them, we can buy an apartment, car or TV right away, without having to save several months or even years. It also happens that there is an unexpected expense that we have to cover immediately, because how to live with a broken washing machine or fridge. Sometimes we have to invest some money in a new job, e.g. to cover the cost of traveling to it. This expense can not wait either. Without a cash loan, we would not have earned much more than the cost of a subway ticket. In general, nothing bad at all. If we borrow wisely and only as much as we can afford, everything is fine.
Let us remember, however, that irresponsible debt can lead us to serious financial problems and more. Granting mortgages to people who were unable to pay them off caused a global economic crisis, the effects of which we struggled for many years. The crisis was also a lesson for those in power who, wanting or not, had to regulate the cash loan market. Not only for the benefit of the economy, but also for the client, who is now better protected by law. Although, on the other hand, getting a cash loan is much harder than 10 years ago.
What is a cash loan?
I think each of us was once in a situation where he immediately needed money and the account was empty. We can then ask for help from family or friends, but often we do not have such opportunities. Especially that for our relatives in Poland, the amount needed is much more valuable than for us living in the UK. Another issue is that we often do not want to have a debt of gratitude to someone or simply, we do not intend to abuse someone’s goodness.
The ideal option in this case seems to be to use the services of a bank or non-bank loan company. The latter did not enjoy good fame, but after the financial crisis, their situation in the Islands was regulated by the Financial Conduct Authority. If you want to be sure that you are dealing with a company that meets general standards, always choose those registered with FCA. Information about this and a special number can be checked on the lender’s and the institution’s website. Cash loans in the UK are divided into different types. It all depends on our creditworthiness. Some are cheaper but less accessible, others vice versa.
The simplest and cheapest loan to cover small expenses for which we ran out of money is to do an overdraft. Overdraft is also an overdraft, sometimes called a credit line. This is because you can do a minus without risking the consequences. In other words, it is a situation where you have spent more than you have on your account. The most common is that when you top up your account enough to be in the plus, you don’t have to pay any costs. The term depends on the bank, but is usually around 1-2 months. It is worth noting that overdraft is repaid automatically as soon as you get the transfer. However, one should remember that never, even by a pound, do not make a minus sign greater than that agreed with the bank. It threatens with really high and disproportionate penalties. The upside is that you don’t have to apply for a loan every time.
Simply put, if you top up your debit, you can use it the next time at any time. Another form of quick borrowing is having a credit card. In this case, it also costs you nothing if you pay back on time. Each bank sets its own terms. A credit card, in many ways resembles overdraft, differs in that it is not repaid automatically. It is better not to use it to withdraw cash from an ATM, because it creates high costs. Depending on your creditworthiness, you get it from the bank and you can spend a certain amount. In principle, you don’t have to pay it back for quite some time, in such cases you pay only interest. It is also a good solution for those who do not want to use it and plan to take a larger loan or mortgage. Such a card builds our credit standing, of course, unless we are in arrears with its repayment.
Another form of cash loans, also for Poles working in the UK, is a traditional bank loan. Usually it is low-interest, it is paid in installments. This is a good option when you want to borrow money for longer. In such cases, the bank usually provides a representative APR, i.e. the total annual interest rate, but remember that loan terms are a very individual matter. Not everyone gets an interest rate, such as in advertising. It all depends on your creditworthiness. If your credit score is low and you need money immediately, you can use the services of a non-bank loan company, e.g. via the UK Loans page.
The interest rate is usually higher than in a bank, but the loan is much more available and often without certificates. This is a good option if you need cash and you have a sudden expense that you cannot wait for with. The loan period is usually short, up to six months. The conditions, however, are very different and depend on the particular company. Of course, the longer you want to pay off the debt, the more you will pay. Always check the real interest rate in your case in such cases. All you need to do is add all the installments and then subtract the borrowed amount. Then you will know how much a loan costs you. A home loan is also very popular. Here, however, the procedures are much more complicated and the requirements greater.
Am I eligible for a loan in the UK?
The procedures for granting cash loans in the UK are more stringent than in Poland. It all depends on which bank or company we go to, what amount we want to borrow and, above all, what is our credit score. Credit score is, in other words, creditworthiness. Credit check result, i.e. checking it by a given institution. The first rule is to measure your intentions. It should be remembered that applying for a loan too often, especially when we meet with a refusal, reduces our ability for several months. We appear to the lender as an unreliable person. The one that bases its financial life on loans. How to fix it?
First, you can use the services of a broker. However, for smaller amounts, it is not very profitable. So you can do so. soft credit check, i.e. non-binding check. One whose trace will not be recorded in our credit history. Some websites make this possible. Some of them are free for the first month. Therefore, you must remember to unregister in time. Therefore, when we know that we have a good chance of being approved by a bank or loan company, we can apply for a loan. However, many are wondering what criteria are taken into account when assessing it. Well, first of all, this is our credit history.
The lender wants to know if we have regularly fulfilled our obligations in the past. And this is not just about loans, but also about bills. Contrary to appearances, it does not look good when we have never borrowed anything. At first glance, such a person seems trustworthy, after all, he never lived beyond his means. For the lender, however, she is an unverified person. Many people therefore do so that even without needing, they take, for example, a credit card. To build your story. This makes sense especially when in the future we want to borrow more money. For example, for an apartment. Our credit score will not only be affected by whether we pay our obligations on time.
It is also important how many there are. If we have another loan, telephone subscription, gym membership, etc., it means that we do not have too much free money that we could spend on installments. However, when making a decision, the lender also uses several other criteria. It is very important how long you have lived at this address. In general, stability is the key to success. Therefore, a bank or loan company will also check how long you have been working in a given place and … whether you are registered in the voter list. The latter is quite easy to do. You will then be seen as a person who has permanently associated with the community, and therefore will not run away from commitments. Finally, the most important thing. Permanent work.
The more you earn, the more and on better terms you can borrow. The type of contract is also important. The employment contract is more rewarded than, e.g., self-employment. If you take out a mortgage, you need to be aware of much more thorough control. The bank may ask you for everything listed, plus spending. Even as small as eating out. You will need to provide excerpts from all the cards you have. In turn, for non-bank loan companies, the criteria are much easier to meet. The standard is that you only need to have a job, receipts of several hundred USD, be at least 18 years old and a bank account.
Many of these types of companies provide online cash loans, even if someone is in the UK recently. It should also be remembered that the so-called cooling off period. So fourteen days, during which the borrower can change his mind and cancel the contract. Of course, he must pay back the amount borrowed, along with the interest that accrued until his resignation. It is also important not to take a loan if you are not sure that you will pay it back. Especially in the case of payday loans, it can cause serious financial problems. It is worth noting, however, that in many companies, the calculation of penalty interest or fees stops when the sum to be donated reaches twice the amount borrowed. Therefore, he will never give up more than twice as much as borrowed.
Can I get a cash loan with a bad history?
It is often the case that life, especially financial life, does not go our way. We work hard but we lack the current expenses. It also happens that one, not very responsible decision gets us in trouble. Still others have applied for credit too many times, not knowing that it may harm their credit score. The reasons are different, the effect is the same. We have a bad credit history. Remember to check your creditworthiness in advance.
The easiest solution is to go to the bank where we have an account. His employees often receive a commission on the financial products they sell to us. Therefore, they also want to submit such an application so that it has a good chance of success. People who usually have a lot of experience in granting loans do it every day. However, if we want to have greater certainty and we want to get to know various offers impartially, we can consult a broker. This is a common practice for larger loans, e.g. mortgages. The UK loan market is very complicated and you need a specialist to get an idea of it all.
Requirements may vary, conditions may vary. The broker will advise us which offer to choose and what credit we have the chance to get. The downside of this option is that the salary for such a specialist is usually high. If we borrow a smaller amount, it is worth doing a soft credit check on a free website, as we wrote earlier. Remember not to trust non-bank loan companies that convince us that they will lend us money without checking our credit score. Well, according to English law it is illegal. The good news is, however, that most of these companies, even though they check our credit history, are willing to give us credit online, even when it’s bad.
Non-bank loan companies have the basic advantage that the requirements are very low. Even if we had problems with payments in the past, this does not prevent our chances of a loan. However, it should be remembered that if our credit check fails, we will receive a proposal for worse conditions than a person who has never had problems with repayment. The amount for which we are applying or the loan period may also be questioned. It may therefore be that the lender will lend us less and for a longer period. It all depends on the individual case. We should remember, however, to always recalculate if a given offer is profitable for us and, above all, whether we will be able to pay the installments. Different companies have different policies in this respect. Therefore, before submitting the application, you should read the general conditions and avoid those companies that warn us in advance that we will not get loans. All this in order not to spoil our creditworthiness even more.
What are the loan costs in the UK?
This is a standard question. After all, we usually want to borrow money as cheaply as possible. A representative APR, i.e. typical annual interest rate for a given financial product, is usually available on the websites of loan companies and banks. However, it cannot be uncritically guided. This does not mean that we will receive such conditions. It all depends on our creditworthiness. On non-bank loan companies’ websites, we usually have an easier task. Special loan calculators are available, thanks to which we can calculate exactly the installment, interest and, above all, how much we will have to pay back in total.
APR does not say much in such situations, because we usually do not take payday loans for a year. It is therefore worth calculating the total interest on your own. To do this, add all installments and deduct the amount borrowed from them. Then calculate one hundredth of the sum we borrowed (comma two places to the left or cut two zeros) and divide by it the total costs that we must pay off in addition to it.
We’ll get the percentage we had to give back. We will explain it with an example. You borrowed 400 USD for three months. After adding up the installments, it turned out that you have to donate 566.79 USD. That’s 166.79 USD more than you borrowed. So we divide 166.79 USD by one hundredth of four hundred, or four. The result is 41.7 percent. It is also worth looking at daily interest, which is usually around 0.8 percent.
This is especially important in the event of late repayment. For larger loans, e.g. for a house or flat, you often have to add the costs of a broker. Unfortunately, he will not advise us for free. His fee is quite high. For example, when applying for a loan of 350,000. USD, we’ll have to pay him around 1500 USD. However, we should remember that thanks to it we can significantly save, because it is able to choose a favorable offer for us. There are also special websites, such as UK Loans, which act as brokers. They offer a comparison of cash loans. You don’t have to worry about additional fees, because companies handle it among themselves.
What if I can’t pay?
Usually, loans from non-bank companies are repaid using the CPA. This is a type of automatic direct debit. Specifically, it means that you give your company permission to collect debits from your account. In this case, she does not have to obtain permission each time. You have the right to withdraw such consent at any time. To do this, you need to contact either directly the company where you took the loan or the bank where you have an account.
This does not mean, however, that the debt is disappearing. In this case, you must propose an alternative form of repayment. For example, through recurring transfers. Unfortunately, it also happens that, despite strenuous intentions, we are not able to pay the installments on time. The rule in such situations is one: get along. Companies of this type grant thousands of loans. They have extensive experience with clients who are unable to meet their obligations. It is also in their interest to amicably resolve this type of situation and get it less or later than exposing the client to hide.
The standard fee in this case is $ 15, but that also depends on the lender. It should also be remembered that daily interest is charged, its amount is available on the website of such a company. Most often, however, the sum of all fees and penalty interest may never exceed the amount we borrowed. Therefore, we will never give back more than twice as much as we borrow. You certainly should not hide and avoid contact.
In such situations, the company perceives it as our bad will and may start looking for us, for example by contacting our employer. Therefore, you should always contact the lender immediately if you realize that we are unable to pay the installment. Various options are available. From postponing the deadline to a new, more convenient repayment plan. What should also be avoided and what may come to our mind first is taking a new loan to pay off the next one. It’s easy to fall into the so-called debt loops. In this case, the amount to be repaid is increasing. This is because each subsequent loan generates more and more costs. Our credit standing, in turn, is steadily decreasing and we can not borrow anything. We have to pay back the debt anyway, often much more than at the beginning. It is worth looking around for some extra occupation or other way of getting money. One that will help us get out of trouble instead of driving us into even greater ones. A cash loan cannot become a way of life, it should be taken only if we are sure of its repayment. There are also special institutions that will deal with your case impartially. They often act on behalf of the government and help people in financial problems. Thanks to them, you can reach a settlement with the creditor and determine how to pay the debt. As a last resort, if you are unable to pay your debts in any way, you can file for consumer bankruptcy.
Is it worth paying off the loan earlier?
There is also a reverse situation than in the previous paragraph. Well, we have more money than we need. We got an extra cash flow. The reasons can be different. We had a decline, we received a bonus at work, we won the lottery. Each accident combines one thing. We are then thinking about using this money wisely. We don’t want to lose them and have nothing of it. In modern society, almost everyone has cash loans. Whether for a car, a house, but also a smaller one, for a TV or a new laptop, the purchase of which could not wait. Therefore, it seems very reasonable to use additional funds to repay the debt.
After all, each loan is a burden. Something we would happily get rid of. The question, however, is whether it is worth doing it. Is it profitable? The first rule in such cases is to read the contract carefully. If in doubt, we can contact an employee of a bank or loan company. Regarding the former, contrary to what common sense tells us, they are not happy that we want to give them money earlier. Banks earn interest, and early repayment will deprive them of it. When it comes to credit card or debit, there is usually no problem. We have a free hand in this matter. However, the situation is different with cash loans, especially mortgage loans. Penalties for early repayment may even be charged here. Sometimes overpayment is possible, but only to a certain extent.
It all depends on the type of loan and the bank where we have it. So it’s best to find out before you sign the contract, you never know if there’s going to be extra cash in the future. When it comes to cash loans from non-bank loan companies, there is usually no problem. However, let us remember one important rule that applies to most modern loans. Well, if we want to repay it earlier, we must give up all the capital calculated at the moment.
This seems obvious. We have to pay back as much as we have left. Let us remember, however, that the first installments are characterized by the fact that they mostly cover interest and, to a smaller extent, capital. It may therefore be that we borrowed 5,000. USD, we donated in installments of 2,000 USD. It would seem that it is enough to give away 3 thousand. USD. However, it turns out that the capital has decreased to 4 thousand. USD and we have to give back if we want to get rid of the commitment, because a thousand USD was used to pay interest. It is therefore worth finding out in advance whether such early repayment will pay off. This is best done directly with the lender. He can also find out what capital remains to be repaid.
Common sense comes first
As you can see, the cash loan offer in the UK is very wide. Virtually everyone will find something for themselves. It is worth building your credit history, even if you do not need money at the moment. You never know when it will happen. Building a positive relationship with your bank or loan company is also a good solution. Often regular and proven customers get better offers. First of all, you need to use common sense and recalculate everything.
One should also remember about cooling off period, i.e. the right to resign from the contract within 14 days. If you have problems paying back, you should always contact the lender. It’s really not worth hiding. Nor are the revelations that it is enough to leave the UK and the credit does not need to be returned. There is such a thing as a European Payment Order. The creditor has the right to pursue us on its basis throughout Europe. I don’t think we want to receive every registered letter with trembling hands when in Poland. If our problems are more serious, it is worth reporting to government agencies that help in such situations. Specialists in this field will not only advise us, but will negotiate real repayment terms on our behalf. It is even possible to write off part of your debt or interest. This institution is, for example, IVA. Another form of assistance is establishing the so-called Dept Management Plan, i.e. setting one installment for all receivables that the debtor is able to bear.