Cheap, Low Interest Loans From Direct Lenders
- Finding loans at a lower interest rate can make a massive difference to the overall amount you repay.
- UK direct lenders compete to provide you with cheap loans, helping you to save.
- Even if you have bad credit, there are lending options available to you online.
There is a cost to borrowing money. Every time you take a loan, you pay back what you owe and an additional interest which is basically a fee the lender charges you for the loan. You cannot escape paying interest whenever you take a loan.
It’s how lenders make money from their services. If you can get a loan with a lower interest rate you will save money and still be able to repay the loan in lower instalments.
This is why it is important to take time and research for low-interest loans when you want to borrow money.
What is interest rate in a loan?
When you borrow money from a lender whether it is a bank, credit union, or a direct lender, you will be charged an interest rate. The interest rate is normally calculated as a percentage of the total amount of money you borrow. It is the fee a lender charges you on top of your loan repayment every month.
The rate charged depends on several factors including the total amount of money you borrow, the period you will take to repay the loan, the type of loan you take, and of course your credit score.
What is a tiered interest rate system?
In a tiered interest rate system, the lender will charge you different rates depending on the amount you borrow. Basically, the more you borrow, the lower your interest rate shall be. Some types of loans such as payday loans do not follow this rule.
This is why it is important to only borrow what you can afford to pay back even when borrowing higher amounts gives you lower interest rates.
What effect does my credit score have on the interest rate of my loan?
When you apply for a loan, the lender will usually run a check on your personal data to determine if you are creditworthy. Lenders typically assess information such as your credit report, credit history, public data including CCJs, your income and savings, and any other data they might have on you if you are a returning customer.
They’ll, therefore, know your credit score and use it to determine the amount of interest to charge you. With a good credit score, you not only improve your chances of getting approved for a loan but also get lower interest charged to the loan.
However, keep in mind that different lenders have different ways of evaluating the interest rate to charge on loans. This is why some lenders will charge you a lower interest rate than others despite your poor credit rating.
At Vamoola.co.uk, we connect you with carefully selected lenders of all types of loans who have the best interest rates for their loan products. We don’t provide credit but help you find low-interest short-term loans from reputable lenders.
What are the key features of a low interest loans lender?
When looking for the best lender for any type of loan, the most important thing you need to do is check the amount or percentage of interest they typically charge.
The interest rate you’ll be charged will determine the overall cost of the loan you take. It tells you how much you’ll end up paying in total or the overall cost of the loan.
Other important factors to consider in a low-interest loan include the following:
- If you are taking a short-term loan, check the loan limit that each lender provides. Some lenders normally have a low limit capped at just £1,000. Look for a lender that gives you a higher limit depending on the amount you want to borrow and your ability to repay the loan.
- The most competitive interest rates. It may be quite difficult to get short term loans with low-interest rates, especially if you have a bad credit score. But it doesn’t cost you much to shop around and compare different lenders to find one with the lowest interest rates. Avoid lenders with exorbitant interest rates. All the lenders you find at Vamoola.co.uk have been vetted and found to have the most reasonable interest rates for different types of loans and consumers.
- Flexible payment terms that are ideal for your unique needs and ability. Transparency. There is nothing as bad as committing yourself to a loan agreement only to find that the lender has added more fees or charges to the loan after you have already it. Honest and transparent lender should be very clear about interest rates, loan amounts, repayment terms, and any other pertinent issue. They should clearly communicate this information before you take the loan.
How much can I apply for in a low interest loan?
In most cases, the higher the amount you apply for, the lower interest you’ll be charged. However, the rule does not apply to most short-term unsecured loans such as payday loans.
So, the maximum amount you can apply for largely depends on the lender’s terms and conditions as well as your ability to pay back the loan. Most lenders have a lower limit for new customers, usually capped at £150 to £1,000 while regular customers with a good repayment record can borrow up to £2,500 or more.
How do I get a low interest loan?
If you want to get a low-interest loan, take time to consider the following factors:
- Check your credit score to determine if your credit will affect the amount of interest you are likely to be charged.
- Take time to research and compare different lenders to find one with the best APR. We provide you with a good number of lenders with the best rates and terms on the loan market today.
- Find out if the lender you choose charges extra fees such as loan set up costs as well as early and late loan payment penalties.
Am I limited in the way I use the low interest loan?
You are not limited to what or how to use the loan. You can use the loan to pay for anything from your car repairs and home improvement purchases to medical bills, education expenses, and other urgent needs for cash.
However, it is important to always have a clear plan before you borrow money to ensure that it goes into good use. If you are lucky to get a low-interest loan, make sure it is for a worthwhile purpose or use it to handle an urgent financial need.