Category Archives: Personal Loans

What Questions Should You Ask Before Taking A Loan?

What Questions Should You Ask Before Taking A Loan?

Many questions linger in the minds of borrowers before they take loans. When you consider the implications of taking a loan and being unable to repay it, it’s important for every borrower to be properly informed from the onset. In case you are wondering what you should ask yourself and your bank before you take a loan, here are important questions to consider.

1. Do I really need a loan?

It’s easy to get a loan nowadays, so it’s crucial for you to ask yourself if you really need one. Banks advertise loans all the time. However, you need a better reason to take a loan. If you don’t have a reason of your own, let your bank give you a good reason. Some banks have business loan programs meant to provide people with business loans as well as the expertise needed to set up prosperous businesses. If you’ve always wanted to start your own business, you can consider such a program.

2. What type of loan is the best for me?

You should ask yourself and your banker this question before you decide to take a loan. This question is important since there are many types of loans ideal for different purposes. For instance, a payday loan is perfect for emergency expenses. However, it’s not handy for starting a business. Personal loans also have notable benefits over business loans and vice versa. Depending on your reasons for taking a loan, your banker should be best suited to suggest the best type of loan for you. Nevertheless, you should be able to assess if the type of loan you are about to take is actually the best type of loan for you. You can assess things like interest rate charges among other repayment requirements i.e. the term of the loan to decide if the loan in question will work for you.

3. What’s the total cost of the loan?

This is another crucial loan question to ask yourself and your banker. It’s worth noting that loans are usually structured in terms that can be difficult to understand. Some lenders actually do this on purpose. The chances of a loan being more expensive than you actually think are very high so, make sure you find out the actual cost. You should do your own calculations if you have to or ask your banker to do the same on your behalf. This question is very important since the actual cost of most loans is usually hidden in confusing financial jargon. Don’t take chances. Know the total cost of any loan beforehand otherwise, you won’t be able to make an informed decision.

4. What happens when I repay early?

It’s also crucial to find out if there are any penalties if you repay your loan early. Most lenders don’t want you to repay your loan early since they earn most of their money in the form of interest income. It’s usually in the best interest of banks for borrowers to service the loan for the entire term. To discourage early repayment, banks usually have penalties. Although most banks disclose these penalties, some may hide them in the fine print. It’s crucial to find out if there are such penalties and when they apply if you are interested in repaying your loan faster.

5. What documents do I need to provide?

To get your loan amount in record time, you need to ask yourself and your bank what documents you need to provide to qualify for the loan in question. Business loans require business documents ranging from licenses to financial reports. Personal loans require bank statements, pay slip/income information, etc. Since different lenders tend to have different requirements, find out the type of documents you need in advance and provide them with your application to reduce the time it takes for your bank to process your loan.

Summary

You shouldn’t take a loan because everyone else is taking one. You shouldn’t assume the total cost of your loan either or take any loan that comes your way. It’s also important to know all the requirements for qualifying beforehand to avoid wasting time. Loans come with many requirements, risks, and costs that you should be aware of before committing yourself.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Saving Money vs. Taking Out Loans

Saving Money vs. Taking Out Loans

It is always advisable to build an emergency fund by saving a portion of your income every month. An emergency fund is always handy when you incur unexpected expenses such as; medical bills and car repair bills. You can’t afford to put such expenses on hold. If you don’t have savings, you will be forced to take out short-term loans such as payday loans to cater for the expenses. Saving money has always made sense. There are however exceptions. Below is a discussion to help you make an informed decision if you are torn apart between saving and taking loans.

Saving money is highly recommended

You should always strive to save a portion of your income every month whether you have loans or not. Developing a saving culture is important because there will always be something that you can buy with excess money. Furthermore, life is full of eventualities. You can fall sick, get involved in a car accident, lose your job, etc. When any of these eventualities happen, you need to have an emergency fund to cushion you before you get back on your feet. In such cases, you may not be able to qualify for a loan. Your savings will be your last resort. Having substantial savings also gives you that much-needed peace of mind. Many people suffer from financial stress because of living from hand to mouth. You need to save to avoid unnecessary stress when you incur unforeseen expenses.

When is taking loans better than saving money?

When you have a business idea that requires a substantial amount of money, it may be better to take a loan than to try and save up money. Taking loans for investment purposes is advisable. It can take you decades to save up enough money to start your business. Furthermore, most business opportunities don’t remain viable for long. You will almost always lose out if you save up to start a business. Savings can only take you so far if you don’t have a substantial income. There is nothing wrong with taking a business loan provided you have done your research. You should also make sure you get favorable loan terms.

Short term loans like payday loans are also ideal when you don’t have access to your savings. If you have a locked your savings in a savings account, you may not have immediate access to your money in case of an emergency. Payday loans come in handy in such cases. The loans are available instantly at reasonable interest rates if you borrow from a reputable payday loan lender or use a licensed broker like Swift Money. Payday loans are also easier to access. You can apply online. Some savings accounts aren’t accessible online. In cases where you don’t have the luxury of time, it’s always better to take out a payday loan or other types of short term loans instead of waiting to save up.

Saving and taking loans

There is nothing wrong with saving and taking loans at the same time. As long as you qualify for a loan and you have a good reason for taking the loan, you can save while you take up new loans. You should stop taking up new loans if you will have problems repaying them. However, don’t forget the benefits of taking up loans. For instance, you are bound to boost your credit score by taking up new loans provided you service them as required. Savings don’t offer such benefits.

Should you start saving after you are debt-free?

Although it is better to start saving when you are debt-free, in most cases, it may take too long for you to start saving if you focus on clearing all your debts first. Some debt i.e. home loans take more than a decade to clear. Home loans can take less time if you channel your savings to repaying the loan. However, it’s not advisable to do so if you don’t have a substantial emergency fund. Your priority should be setting up an emergency fund. Once you have done that, you clear your debt and then go back to building your savings account.

Furthermore, it may make more financial sense to service debt than repay it as soon as possible. Most lenders charge fees for early repayment making it better to continue servicing debt. You may also be getting a loan at a very good rate.

Summary

When it comes to saving vs. taking loans, it’s a matter of perspective and scenario. It is prudent to save in most cases. In other cases, however, it may be better to take loans. In a nutshell, it is up to you to analyse your current situation to be able to make an informed decisions.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
What is the Difference Between Secured and Unsecured Loans?

What is the Difference Between Secured and Unsecured Loans?

Personal loans can either be secured or unsecured. The difference between secured and un-secured loans can be explored in the definition, interest rate, credit requirements, availability and the loan amount. To start with, let’s define secured loans.

What are secured loans?

Secured loans are simply personal loans that are backed (secured) using an asset i.e. some form of property, a car, etc. Since assets back secured loans, lenders have the right to sell the asset in question if a borrower is unable to repay their secured loan. Although most lenders usually give borrowers a chance to meet their repayment obligations before they decide to sell the asset in question, they aren’t legally bound to do so. A lender can sell your security without going to court if you violate the terms of your secured loan. Mortgage loans are perfect examples of secured loans. In such a case, the home/property you purchase is the collateral.

What are unsecured loans?

Unsecured loans are personal loans which don’t require collateral. You don’t need to have a house, a car or any other form of asset to get an unsecured loan. As a result, you don’t stand to lose your property or asset in case you default on the loan. There are however dire consequences of defaulting on unsecured loans. For instance, your lender can sue you. In such instances, there are high chances of losing any asset you own. Defaulting on an unsecured loan (and any loan for that matter) also hurts your credit rating making it ver hard and more costly to get loans in the future. A perfect example of an unsecured loan is a payday loan.
Other significant differences

There are other notable differences between secured and unsecured loans apart for the fact that secured loans require collateral and unsecured loans don’t require collateral. These include;

Interest rate

Secured loans tend to have better interest rate charges than unsecured loans because they are less risky. Since you provide collateral before getting a secured loan, the loan is less risky for the lender. It’s worth noting that the risk factor of a loan is one of the most important considerations when determining the interest a borrower is supposed to pay. Since lenders are less worried about you repaying a secured loan, the interest rate charged is less. Unsecured loans expose lenders to unnecessary risks including other problems i.e. legal fees when pursuing defaulters. This explains why the interest on unsecured loans is usually higher.

Credit requirements

The difference between secured and unsecured loans can also be explored in the credit requirements. For instance, a borrower’s credit history is always a factor when issuing unsecured loans with the exception of payday loans. Unsecured loans are usually given to borrowers with a good credit history i.e. borrowers who have shown a good/impressive ability to repay their loans in the past. Payday loans are an exception because they are usually available to individuals with bad credit. You must, however, have a job or regular source of income to qualify.

For secured loans, however, you don’t need to meet strict credit requirements since you provide security for the loan.

Availability

In regards to availability, unsecured loans are more available than secured loans. Payday loans are widely available than any other types of loans in the UK. It is possible to get unsecured loans easily online or offline through the countless UK loan lenders available today.

Secured loans are less available since they aren’t sought after by many people. Most people don’t have the collateral to secure loans. The few that have collateral/assets usually don’t need loans.

Loan amount

Secured loans tend to be available in larger amounts compared to unsecured loans. Secured loans are specifically suited for individuals with substantial cash needs.

Summary

The above information discusses the main differences between secured and unsecured loans. After reading the above information, you shouldn’t have a problem deciding whether to take a secured or unsecured loan. For instance, secured loans are best suited for you if you have collateral. On the other hand, an unsecured loan such as short term loan will be perfect for you if you need cash immediately, but you have a bad credit score.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Borrowing for a holiday: Is It A Good Idea?

Borrowing for a holiday: Is It A Good Idea?

Let’s face it! It doesn’t sound too smart taking out a loan to finance a holiday right? Well, yes but there’s a twist to it. You’ve probably heard that it’s a bad idea to borrow to finance a liability. Well, a holiday can be an asset or a liability depending on who you ask. So, should you really borrow to pay for a holiday? If you want to take out a personal loan or any other kind of short term or long term loan to finance your holiday, here’s what you need to know first.

1. There are situations that warrant borrowing for a holiday

First and foremost, it’s important to note that it’s not always a bad idea to take out a loan to finance a holiday. Having quality time during the holidays with your family is very important so there’s no problem borrowing some money especially if you can afford it. Furthermore, you don’t need to be broke to take out a loan. You may be taking out a loan because you don’t have access to your money at the moment. For instance, you may have some investments that you don’t want to liquidate because the returns aren’t favorable at the moment. In such a case, a loan is justified. The consequences of failing to spend quality time with your family is worse than having to borrow a small loan to fund your holiday expenses. If you can pay for the loan comfortably, go ahead.

2. You need to plan in advance (know how much you need to borrow)

When taking a loan to fund your holiday expenses, you need to plan in advance otherwise, you will end up having problems later. You should never take out a holiday loan before you determine the amount of money you need. Borrowing using estimates is a recipe for disaster. Planning in advance ensures you borrow exactly what you need which is a great way of controlling your expenditure. It doesn’t really matter if you are taking out a payday loan or personal loan to finance your holiday, you must know how much you need in advance.

3. Look for holiday loan offers

Retail stores aren’t the only businesses offering great deals during the holiday season so, if you have to borrow, make sure you are getting the best deal possible. Banks among other financial institutions offer great loan deals for the holidays. It’s therefore up to you to source for the perfect holiday loan deals. There are plenty of great holiday loan deals available currently in the UK. You just need to shop and choose the best deal for you.

4. Plan to spend wisely

Most people have problems on holidays because of overspending. It’s very easy to overspend during a holiday if you don’t have a budget/plan in place. This is precisely why many people end up taking more than one loan to fund holiday expenditures. To avoid taking in an extra loan and incurring unnecessary expenses, spend wisely. Avoid impulse buying at all costs. You should also capitalise off the numerous discounts offered during the holiday season. Always remember that there is life after the holidays. Have a budget and don’t get carried away!

5. Borrow to fund basic holiday celebrations

Sometimes you may feel the urge to borrow to fund an overseas trip. In such a case, it’s better to consider less expensive holiday celebrations unless you lack money temporarily. It’s never a good idea to borrow to fund a lavish holiday especially if you will have trouble repaying the loan.

Summary

The holiday season has many surprises. You may not get your finances in order in time because of many reasons i.e. late/delayed payments etc. In such instances, you may be forced to borrow to fund your holiday expenses. As long as you plan in advance, look for the best holiday loan offers and spend wisely, you shouldn’t have any problems repaying your loan after the holidays. Furthermore, there is much more to holidays than spending money. If you can stick to a loan amount that is manageable, then there is no problem with taking out a loan for a holiday.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Top Loan Negotiation Tips to Use to Get the Best Terms

Top Loan Negotiation Tips to Use to Get the Best Terms

Even if you are getting what appears to be the best loan deal in the market at any given time, there’s always room to negotiate. Banks price loans with this in mind because they don’t expect you to accept the initial loan terms. Unfortunately, not many people negotiate and the few that do don’t do it like they should.

Instead of leaving your bank to decide all the loan terms or accepting the next best terms given to you, there are a number of things you can do to get loan terms which most people can’t get. You should always remember that banks need to give loans to make money so, you are not the only one getting help. It’s a symbiotic relationship, and as the customer, there are always ways to get better terms. Here’s what you need to do;

1. Work on developing a relationship with your bank’s loan officer

Always remember that the bank gives its best loan terms to the customers it knows/has a relationship with so, start cultivating your relationship with your bank early. To do this effectively, you need to know the bank workers who matter the most. Although the tellers and bank managers can help you get loans, loan officers are the once who have in-depth knowledge about the best loans and terms. In simple terms, a loan officer who knows you and your financial situation is in the best position to find you the best loan and terms so, take time and know your loan officer before you decide to take out a loan.

2. Identify your bank’s needs

You also need to know how what your bank needs at that particular time. As mentioned above, banks depend highly on interest income to make money so knowing how well your bank is doing can help you negotiate the best terms. For instance, although a bank that is struggling will be highly motivated to give loans, a bank that is doing well will be more willing to negotiate. The most important thing is finding out how motivated your bank is to bend their terms.

3. Come up with a negotiation strategy in advance

You should also prepare in advance to make sure you have the upper hand while negotiating. First, you must find out which aspects are highly important to you (non-negotiable) as well as the once you are willing to negotiate. You should also know how far you are willing to negotiate. Ideally, you should only negotiate those loan issues that are less important to you. Preparing in advance gives you an upper hand at the negotiation table.
Bankers tend to respect borrowers who can read in between the fine print. If you can be able to compare loan terms for what they really are instead of listening to your lender tell you how great the terms are, you will erode your loan officer’s power and be in a better position to negotiate. The idea here is making sure you gain respect and participate in the negotiations like an equal as opposed to being the pigeon.

4. Don’t accept high-interest loans

Interest is one of the most crucial factors to consider when negotiating for loans because it determines how much more you need to pay for the money you are getting. So regardless of your credit situation, don’t accept high-interest loans. Borrowers who show a willingness to compromise on interest rates never get the best terms. In fact, you should be willing to walk away if your bank appears to be rigid about high interest rate charges. Although different banks may charge different rates, you should be able to get a single digit APR if you have good to average credit. If you have bad credit, you shouldn’t accept rates as high as 25%.

5. Negotiate everything

Although interest may be the most important factor to consider when negotiating for the best loan terms, there are many other factors to you should consider like payment schedules, security arrangements, fees payable, etc. that have a direct impact on the final cost of the loan. For instance, you should choose flexible repayment schedules and an appropriate repayment term that matches your cash flow. Also, the security you are supposed to put up and the fees payable shouldn’t be excessive. Remember to negotiate on all these things including the loan restrictions. You will be surprised how much banks earn over and above the interest they charge.

6. Be willing to look around to get what you want

You also stand to get the best loan terms if you show your bank that you aren’t desperate to get a loan from them. If you do your homework in advance and show your bank that you can get better terms with other banks, you stand to get those same terms or even better. Always remember that the best deals are given to those who aren’t desperate so even if you seriously need money, never show it. Do your homework and stand your ground when you get to the negotiating table.
It doesn’t matter if you want a personal loan, short-term loan or long-term loan. You can’t get the best terms possible if you don’t negotiate. Luckily, you now know everything you need to know to negotiate effectively.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Loan Secrets of the Rich: What You Need to Know

Loan Secrets of the Rich: What You Need to Know

Getting into debt isn’t a bad thing if you purpose to use the debt wisely. It’s important to note that most of the wealthiest people today got to where they are by using other people’s money (or debt if you like). It’s not a secret. Many wealthy people have been on record attesting to this fact. Large companies also get ahead by taking on debt so what is it about debt that tends to work for the rich? Here’s what you need to know

Borrow to buy assets 

Rich people follow this debt rule religiously. You should never borrow to fund a liability. Liabilities are things which take money out of our pockets. A good example is a personal car. Your personal car will never put money into your pocket unless you hire it out or use it in your business. Personal cars need insurance, maintenance, fuel, etc. but they only seem to offer convenience, and in most cases, public transport is more convenient. So, taking out a personal loan to buy a personal car isn’t smart. Rich people don’t do it. You shouldn’t do it either. You should instead take out loans to buy assets i.e. things that will put money in your pocket like a rental apartment. 

Borrow to start a business

Many rich people also seem to have gotten their big breaks when they took out loans to start businesses. Taking a loan to start a business is by far the smartest way of using a loan. It’s hard to regret if you take a business loan provided you have a solid business plan. Furthermore, it is very hard to become rich when you are working for someone else. This is precisely why you should think of taking a loan to start a business before you think of anything else. 

Borrow when the projected returns are greater than the cost of the loan

Sometimes you may be borrowing to take advantage of a money making opportunity that may not necessarily be a business. For instance, you be looking to buy a cheap house, stock, etc. that you can later sell a high price. Before you take a personal loan to take advantage of such opportunities, make sure the cost of the loan is lower than the projected returns. The rich never take on expensive debt. Everything has to make business sense. If they won’t make some money out of debt, you can rest assured they won’t take it.

Borrow if you can afford to lose the collateral/security

This is another loan secret rich people adhere to. Have you ever asked yourself why rich people never suffer even when they claim to be unable to repay their debts? Well, it’s because they never secure debt with assets they can’t afford to lose. If you can’t afford to lose your house, don’t secure your loan using your house. Taking debt is usually a risk regardless of how solid your plans are so you should always ensure you are protected in case the worst happens. Everyone faces credit risks. However, the rich are usually better prepared for the worst which is why they are able to bounce back faster than everyone else.

The more money you have, the easier it is for you borrow

You should also know that the rich have easier access to loans than everyone else so boost your net worth and have unlimited access to loans. It’s easier to borrow when you are rich because you have more assets which translates to lower risks for lenders. This is the main reasons the rich keep getting richer and the poor have a hard time getting rich. This point alone should motivate you enough to seek loans and spend those loans wisely i.e. buying assets or starting businesses.

Summary

Debt can make you rich. Many rich people who start out poor become rich because of taking up debt and using it wisely. First and foremost, understand that it takes money to make money. You also need to know when to borrow and how to borrow. If you’re smart about loans and money in general, you won’t have any problem taking and repaying your loans. You’ll also get rich in the process.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
How do you decide how much you should borrow? 

How do you decide how much you should borrow? 

Whether you are borrowing a short term loan or a long-term loan, the criteria for deciding how much you should borrow is almost the same. It’s important to follow the criteria lenders use since they ultimately decide how much you can borrow. One of the most important factors lenders consider (and you should consider too) is affordability. To calculate affordability, you need to consider your income and factors such as debt expenses and the size of your down payment (if applicable). Below is a discussion on how to decide the amount of money you should borrow.
What is your debt-to-income ratio?

Your debt-to-income ratio is the percentage of your income you spend on repaying debts like credit card payments, an auto loan, student loan, mortgage, etc. Your debt-to-income ratio shows how much money you spend monthly repaying your debts. If you earn £6,000 every month and pay debts amounting to £2,000 every month, your debt-to-income ratio is 0.33 (33%). 

Lenders have different requirements depending on the type of loan you want. For long term loans, most lenders require all your debt commitments to be 0.36 or 36% or less. The ratio can, however, vary from one lender to another depending on type of loan, term of the loan etc. Short term loans like payday loans have more flexible debt-to-income ratio requirements because they involve small amounts paid over a short period. 

If you earn £6,000 for instance and you have existing debt commitments amounting to £1,000, you shouldn’t borrow more than £1,160 so that your debt-to-income ratio is 36% or less. In this example, your total debt will be £2,160 against an income of £6,000 which is within the recommended (0.36 or 36%) threshold. It is also important to note that you don’t have to borrow more than you need. The debt-to-income ratio helps borrowers determine the most affordable loan amount.

What is your credit history?

Lenders also consider a borrower’s credit history when deciding what they should lend their customers. If you have a good credit history, you will be able to borrow more than usual at a lower interest rate. This shouldn’t, however, be taken to mean that you should borrow more than you need. A good credit history will simply give you leeway if you want to borrow more. If you can afford a bigger loan comfortably, you can use your good credit history to your advantage otherwise, don’t take a loan you can’t afford even if your credit history is good (700 or higher).
 
How much do you need?

Your debt-to-income ratio should give you a rough idea of how much money you can afford to borrow comfortably. Your needs should help you come up with an exact figure. Using our above example, if you can borrow £1,160 comfortably, but you need a £500 loan, don’t borrow more than what you need. Loans especially short term loans like payday loans should be used to cater for unavoidable expenses, not luxuries. Unless you are planning on investing the additional amount, stick to what you need to avoid servicing unnecessary expenditure.

Do you have a down payment?

You should consider down payment when you are taking long term loans like a mortgage. A large down payment allows you to borrow more and vice versa. It’s always better to pay more substantial down payment because you also reduce your repayments and get better interest rate deals compared to someone who pays the minimum down payment. If you don’t have a large down payment, borrow modestly because you have little leverage to negotiate better terms.

Consider lifestyle factors

Your lifestyle should also come into consideration when you are deciding how much you should borrow. Although the debt-to-income ratio is a perfect place to start, you need to consider how the new loan will affect your lifestyle. For instance, when taking up a mortgage to buy a house in a city with poor public transport, you might have to factor in additional transport costs. You might also need to spend additional money moving your children to nearby schools. Lenders don’t account for such factors, so it’s important to consider them yourself. Considering lifestyle factors helps you determine with certainty how much you should borrow and if it is affordable.

There are a lot of factors you need to consider when you are deciding how much you should borrow. The most important factors revolve around affordability. You should never take up a loan you can’t afford to pay comfortably. Luckily, the above factors are adequate to help you do just that.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
How Do You Avoid Personal Loan Scams?

How Do You Avoid Personal Loan Scams?

Overview

Many people turn to personal loans when faced with financial difficulties. Once approved, personal loans offer borrowers some much-needed money to settle pressing cash needs. Fraudsters usually try to capitalize on the vulnerability of some personal loans seekers mostly those people looking for quick cash. 

Most loan scammers take anything they can from loan seekers including personal information and sell it. Although the FCA has strict measures in place to catch and punish loan scammers, there are still many incidences of loan scams in the UK. So, how do you avoid being a victim of a personal loan scam when you are in need of cash? What should you do when you want to get a personal loan without being scammed?

1. Be on the lookout for lenders who ask for upfront fees

One of the easiest ways to spot a loan scam is to check if you have to pay anything to get a loan. The FCA calls it Advance Fee Fraud. Although some lenders may charge fees like loan origination fees, you shouldn’t pay anything for your loan to be processed. It is important to avoid lenders who charge you anything before you get your loan since most personal loan scammers do this as well. With most loan scams, you pay upfront fees between £60 – £100 but never get a loan.

2. Consider the loan marketing tactic
You can also be able to spot a personal loan scam by checking the marketing tactic being used to market the loan. Although it is completely normal for lenders to market personal loans to potential borrowers, the marketing tactics shouldn’t be too aggressive. If you get the sense that you are being pressured to complete a loan application or submit your personal information, think twice. Lenders usually send quotes to potential borrowers. However, they shouldn’t pressure you to take a loan or act fast/immediately.

3. What are the credit requirements? (No credit requirements? Run!)
The credit requirements should also help you identify loan scammers. Reputable lenders never lend to borrowers without assessing their ability to repay the loan. A lender should be concerned about your credit history and/or credit score since it’s an indication of your ability to meet your debt obligations. If a lender doesn’t seem to be concerned about your credit history, credit score or any other information that shows your ability to repay the loan i.e. your employment information, that’s a serious red flag.

4. Does the lender have a reputation, physical location information?
Before you borrow money from any lender, it’s advisable to find out as much information as possible about that lender. Reputable personal loans lenders have a reputation and a good one of that matter. Scam lenders are usually anonymous. It’s hard to find out crucial information about them i.e. their location, registration/authorization/licensing details, etc. when you perform a quick search online. You can visit the Financial Services Register (https://register.fca.org.uk/) to find out if the lender in question is regulated. If you have problems finding information about a lender or what you find is negative, beware.

5. Are the lender’s connections questionable?
Most loan scammers usually purport to work with established financial institutions. Although there are many legitimate loan brokers, loan scammers can’t prove their connections with reputable lenders. To avoid being scammed, you have to be willing to do some homework. Reputable lenders usually have a list of loan brokers they work with, so it shouldn’t be a problem ascertaining a broker’s connections with a reputable lender. You should get details of a broker i.e. phone numbers and location information from the lender in question. If you are receiving calls from unofficial numbers, beware. 

Summary

When you are in dire need of cash, it’s easy to fall to scams. The above information is bound to help you separate legitimate personal loan lenders from scammers. Loan scammers always ask for upfront fees. They also use aggressive marketing tactics and care less about your ability to repay. Loan scammers also have questionable reputations and connections to legitimate lenders so, it’s very important to be skeptical before you take out any personal loan regardless of how slick the loan promotion looks. Always remember; loan scammers work hard to disguise their scams as professional and legitimate operations. 
 
In case you fall prey to a loan scam in the UK, don’t worry. You can report loan scams in the UK to the FCA: Hotline: 0800 111 6768 or Action Fraud. Phone: 0300 123 2040, Website: http://www.actionfraud.police.uk/
 
A great alternative to personal loans when you are in dire need of cash is payday loans. Swiftmoney is one of UK’s most reputable payday loan lenders.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.