Differing Interest Rates

If you are considering applying for a loan, make sure that you do your sums. Keep an eye on the rates of interest you will be charged.

Most companies that offer personal loans and credit cards feature in their advertisements "typical rates". This should be an indication of the interest rates you will be charged.

However, once you have filled in the application forms, you will probably be shocked to find that you will be charged significantly more. This can sometimes be twice as much as the rate you had seen advertised.

So, why have you been quoted a much higher rate? If you cannot think of a reason why, then perhaps it is your credit record that has let you down. Sometimes, if you have not achieved any kind of credit history, then there is very little information for the lenders to assess you on. Maybe you have been working abroad for a number of years so therefore have not applied for any credit. A common instance is men who work abroad and send money home for their wives. The wife will have an excellent credit record as she has dealt with all the bills etc. Leaving the man with nothing to indicate that he is credit worthy.

There could be other reasons as well. You may have had negative feedback left for missing a loan or credit card payment. Your credit rating can even be affected by minor bills such as a mobile phone. At one time only large debts were taken into consideration, but now every debt is considered. If a CCJ (county court judgement) has been recorded against your name it does not mean a loan will be refused. A lender will still consider your circumstances and may be willing to finance a loan, but you cannot expect the best rates to be offered. Those go to people with an impeccable record when it comes to credit.

Your lender will always check your credit records, no matter which type of loan you apply for. It is possible for you to also check this out. You will need to apply to a credit reference agency such as Experian or Equifax. For as little as 2 pounds you can receive a copy of your details for your own records.

Carefully check this information. If there is any information which appears to be negative, and you feel that there were mitigating circumstances, it is acceptable to request that an explanatory note be attached to your file. This would remain in place for six years. Bad feedback will be left; if there have been an unusually large number of credit applications on your record, even if these credit applications were not taken up.

If a mistake has occurred regarding your records, you will need to raise the matter with the agency; they will then contact the lender and inform them of the situation. Whilst this is going on, the query will be removed from your record, so that any other enquirer will be unaware of it.

The best loan deals can be found online, where you will find a broker who will search the market for you. Always be open and frank when it comes to a loan application.

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