'How do I lower my loan payments?' is becoming a popular mantra in the UK as many borrowers are struggling to cope with a combination of increased mortgage costs and above inflation increases in the cost of council tax, utilities, food and other essentials.
Two base rate reductions in the last few months have slightly eased the worries of borrowers struggling to repay their mortgages, loans and credit cards.
But, other factors such as rapid increases in fuel and food costs mean that many people find they still have less disposable income than they did at this time last year, and are desperately seeking to restructure their finances.
If you are in that position, the first step towards getting a better deal is to compare loans and the average headline rates offered by the lenders.
However, bear in mind that even if products are advertised as offering the best loan rates, you will still need to get a quote based upon your individual credit rating, as the advertised rate is not necessarily the one that will be offered to you.
The UK loans industry relies heavily upon the information held by credit referencing agencies in order to make decisions about loan applications.
Not only is it used to determine whether to grant credit, but credit referencing information is also used to set the rate that the loans company will offer an individual, based on their personal risk assessment.
It is therefore important to ensure that the information held about you is correct before making any applications, so it is worth requesting a copy of your file from one of the main agencies.
When it comes to shopping around for a better deal, many comparison websites are now offering to do the leg-work for you by performing a loan comparison based on your individual circumstances, allowing you to compare loans [http://www.
lowermybills.
co.
uk/compare-loans.
html] and their respective terms.
Effectively, you fill in one application form to which the credit reference agencies' information is added, and the results returned by their search and calculation engines provide realistic illustrations of the interest rate that you would pay for a series of loan products.
That certainly saves a lot of time, and could ultimately save you quite a bit of money too.
Better still, this way of assessing any potential deal does not harm your credit record in any way.
Normally, whenever a formal application for credit is submitted it is recorded against your credit record, known as a search.
That is noted so that prospective lenders can see to whom you may have made other applications to when applying for their products.
It helps them make a risk assessment based on how much credit you have outstanding, in addition to the amount of your application.
Using a comparison website also cuts through the marketing headlines and gets down to the realities of how much a loan would actually cost you.
Although many companies advertise 'cheap loans', these may not show the full picture and can be slightly misleading as the advertised interest rate is based upon the average offered to a certain percentage of customers.
It doesn't necessarily mean that they would offer that rate to all customers, and depending upon your risk assessment that could include you.
So, if you are thinking of trying for a loan make sure that you ask for quotes from lenders or use a loans comparison website before you submit a formal application and impact upon your credit file.