How a personal loan could help take the sting out the crunch
Advertising Feature
Ironic isn’t it, that in a time when you might most need a loan, the helping hand traditionally offered by some banks, now famously low on funds, has been withdrawn from all but the already affluent as the recession takes hold?
However, the credit crunch has not put a total freeze on the loans market. Barclays is still lending and has promised to increase loans to customers by £11bn this year. If you are currently considering a personal loan, read on to discover how to borrow sensibly and manage your credit rating. If you’ve been declined a personal loan in the past 12 months or are now considering an unsecured loan as a means of consolidating your debts, it’s worth re-assessing your situation with a view to knocking on Barclay's door.
As frugal and savings-savvy as you’re able to be, life does go on. Cars need to be serviced or replaced, household appliances can and do break down and love and marriage doesn't have to wait for sunnier financial climes. A fixed rate personal loan to cover the cost of ‘big ticket’ items such as weddings or home improvements can, depending on your current level of debt and personal circumstances, offer a smart way to manage your finances – even when times are hard.
Do your mathsIt is essential to consider carefully, first and foremost, your debt-to-income ratio so that you know where you stand before you apply for a loan. This is key criteria for lenders who need to know if you have enough disposable income to make the repayments. If you do not, you will be considered at risk of defaulting, or worse – filing for bankruptcy - and your application will be declined. If you feel confident about your ability to manage repayments:
- Set a clear and realistic figure for the amount you need.
- Calculate the viability of borrowing this sum based on the amount you can afford to pay each month, and the different levels of repayment / interest payments depending on the period of the loan.
Your credit rating
Your credit history and financial footprint is all on file and will be thoroughly checked by lenders to determine your eligibility for a loan. If your credit does not fall at least into the “fair” category, most lenders will be reluctant to offer loans for even modest sums.
If you have worked for the same employer for several years and own your own home, your chances of getting your loan application approved – by any bank, not just Barclays - may be greater. That’s not to say that banks do not understand that people often change jobs for career progression, and this will be taken into good account. While homeowners are generally considered more stable as they have collateral, those who rent and have a good credit score will also be given due consideration.
If you’ve been declined credit and do not understand why i.e. – if you’re finances are in fact in reasonable order, it is vital to get a copy of your file to enable you to right any wrongs and inform the authorities of any errors which might have jeopardized your position. Personal credit history files can be ordered online for a small fee from the three main credit reference agencies, which are Experian (www.experian.co.uk), Equifax (www.equifax.co.uk) and Call Credit (www.callcredit.co.uk).
Do you have County Court Judgments, disputes or any unresolved debt hidden in your financial closet? You can resolve the situation by paying off the debt in full but you must also ensure that records at the Register of County Court Judgments are amended accordingly.
There are also several ways to improve your credit rating that all consumers need to be much more aware of:
- Always make credit card and loan repayments on time.
- Ensure that you get on the Electoral Roll if you’re not already.
- Switching from a ‘pay-as-you-go’ to a contract-based 12-month scheme for your mobile phone involves signing up to a consumer credit contract. Keep up with the monthly payments and this could help improve your credit rating.
If you’d like to find out more about a personal loan from Barclays, please visit www.barclays.co.uk/loans
If you're a Barclays current account holder, you can take advantage of Barclayloan Plus at 8.8% APR typical* on our loans from £7,500 to £25,000. You could also have your money within 3 hours if your online application is accepted. †
† If you apply before 2pm on a working day and your application is approved. Apply after that time and, once approved, you'll get your money the next working day. If you're not eligible to complete your application in Online Banking you may be eligible for a personal loan from Barclaycard at 9.9% APR typical for loans of £7,500 or more. However, money in 3 hours is not available through this route.
* Eligibility criteria and conditions apply. Loans are subject to status and application. We set individual rates on the basis of your financial status and the amount borrowed. You may be offered a Barclayloan instead of a Barclayloan Plus and therefore the rate you're offered may differ from the typical APR shown. **
** If you're offered a better deal anywhere else within 14 days from opening your Barclayloan or Barclayloan Plus with Barclays, we'll beat your offer. Terms and conditions apply to this offer. Please follow this link for more details – view Price Guarantee terms and conditions.
