How credit can help you control finances
IF you’re looking for a loan, new data released this month could prove interesting reading.
Freedom Finance has revealed that debt consolidation remains the primary reason that people apply for a long-term loan, followed closely by home improvements.
The average successful loan application totals £11,612 and if you live in Manchester you are in with a good chance of having that application accepted.
Jeff Poole, managing director of Freedom Consumer Finance, said: “These figures are a clear indication of the important role that credit plays in the UK economy, with several thousand people each year taking out a loan in order to fund the purchase of a car, improve their homes or most distinctly, to streamline their finances.
“Many view debt consolidation as one of the best and most practical ways to handle their monthly loan repayments, which can often get confusing when dealing with various loans from multiple lenders.
“By consolidating debts it enables consumers to have one single repayment.
“As consumers become more financially savvy, it is really positive to see many of them take control of their budgeting, which in turn can reduce overall repayments and improve their credit rating.”
However, when it comes to unsecured loans consumers need to be mindful that many of the top rates advertised for their chosen loan are only available to those with perfect credit scores.
Jeff said: “In reality, there are very few ‘perfect borrowers’.
“A better understanding of lenders’ criteria should help to give applicants a clearer picture of what type of loan they’re likely to be accepted for and at what rate.
“Borrowers also need to be made aware of the risks associated with shopping around online for loans, as these searches often create a digital footprint that can have a negative impact on their credit scores.
“Engaging with companies that use ‘soft search’ technology is a far better way to shop for loans safely, since they do not store this type of information.
“As a result borrowers are able to get the best rate possible for their particular situation, both now and in the future.”