How to Keep Borrowing Prospects Bright amid Brexit Uncertainties?

Just one year before, 52 % of British people voted in favour of Brexit, the historic mandate for leaving EU. Since then, speculations are being made about the impact of Brexit on the UK’s financial sector. The British households, business community and self professionals are eagerly watching each development concerned to their borrowing requirements of today and tomorrow.

Are yours borrowing prospects getting affected by the prevailing uncertainty over Brexit Consequences? How can you still avail a good deal for a personal loan or business loan even with not so good borrowing qualification?

The sense of uncertainty is prevailing in British financing sector because all the discussions over Brexit have so far been focused over “divorce” deal just to find out a way to leave the UK, not over the post- Brexit results. Uncertainties over the future are sure to cut the growth rate. Any possibility for interest rate rise seems very dim. Companies may choose to reduce the stockpiles of finished goods, raw materials and components etc as the weak economic growth is expected by the majority of economists.

Whether you are a salaried person, self-employed or business owner, you are going to face the consequences of political and economic uncertainties resulting in low chances of getting a good lending deal. In a slow economy state, borrowing needs become more powerful leaving you less time to try the different sources.

Seven Tips To Help You Get The Reasonably Priced Loan

 

  1. Analyze The Borrowing Requirement

You may need borrowing for different reasons. Most of the time, these reasons seem justified but when you analyze the loan requirement with perception to cost and repayment capability, some ways to avoid borrowing start appearing.

For example, you want extra money to increase and expand the stock during the festive season but if you analyze the money requirement with a focus on expected profitability and possible odds, the money requirement may not be as much important and urgent; alternatively, you can ask the suppliers to supply the goods on credit.

Similarly, in case you need extra money to meet out personal expenses, analyze the need and explore the possibilities to avoid borrowing. For example, you feel funds shortage for home repairing. The possible ways to avoid borrowing for this cause may be – earning extra through part-time work, renting a portion of your home, renting your car etc.

 

  1. Optimize the Borrowing Requirement

The easy accessibility of lending agencies in the UK has simplified the borrowing as well as it offers more than ever before options to choose the lender. But, you have to pay the interest also over the borrowed amount. So, optimize the required amount. For example, you need £ 1000 for a task; you can reduce the required amount by dividing the objective into phases like stocking the goods in low volume or planning the home repairing in phases or changing your holiday destination. Instead of borrowing large amount in one go, better you take a short-term loan with bad credit; pay the first debt and take the next as the more trustworthy borrower.

Borrow Good amid Brexit Uncertainties

 

  1. Choose The Right Loan Type

Choosing the right loan type is important to get the best affordable deal. For example, taking a personal loan for business purpose is not a good idea; similarly, taking a long-term small amount of loan for home renovation is not a good idea. True, long-term loan reduces monthly repayment liability but it increases the overall cost also. The UK lenders offer a wide array of loans designed for particular objectives and eligibilities; each loan like quick loan, short term cash loan, no credit check loan, small business loan, loan for unemployed etc comes at different terms and conditions.

 

  1. Assess Your Repayment Capability

Getting loan is easy but repaying it in agreed period is not as easy. Earnings in weak economical conditions, like in the UK at present, keep on changing; so, you can’t be sure of getting the fixed income months after months, whether, you are a salaried person or small business owner. Some borrowers tend to borrow maximum as the lender can give but most of such borrowers fall short in on time repayment. Assess your repayment capability accounting risks and uncertainty factors. Never borrow more than the 35% of take home income.

 

  1. Choose the Right Lender

When you explore lending sources, you come across many sources like online direct lenders, financial institutions, mainstream regular banks, building societies, peers etc. Each has its different rules for lending; therefore, selecting the right lender is very important.

For example, if you have bad credit score, bank may turn down your loan application but a direct lender may accept your borrowing request. Similarly, if you are entitled for govt. benefits, trying for getting the particular benefit can eliminate or reduce the borrowing requirement. For example, if you need borrowing during unemployment, job seekers allowance may help you avoid borrowing from private sources.

 

  1. Compare the Lending Deal and Negotiate

OK, now you know ‘how much, for what and from where’. After the introduction of no credit check, bad credit or guaranteed loans, borrowing for almost anyone is possible, provided, he/she is registered adult citizen of the UK under 80 years’ age but the cost matters. Here, you need to compare not only the proposed interest rate but the terms and conditions also including various apparent and hidden fees. Annual percentage rate (APR) is different that the advertised interest rate.

The factors that affect the cost of proposed lending offer are – loan amount, repayment period, credit score, current earning, monthly financial liabilities, profession type, location etc. Never forget to use your right to negotiate.

 

  1. Take Time To Decide For The Best Lending Deal

A lending proposal may seem good up to your primary requirements but it may not be good on practical grounds. For example, a loan offered at the lowest interest rate may carry high fees and penalties. The loan offered at low interest rate may make you a ‘loan prisoner’. According to a report appeared at Guardian News in Jan 2019, “Average UK household debt stands at £15,400. The unsecured debt is 30.4% of household income; it is the highest so far.”

Concluding Note

Uncertainties over the future after Brexit Impact are disturbing the common households because of low interest rate, poor wages, less profitability, slow economy etc. More and more households are experiencing the problems in managing the monthly expenses; therefore, borrowing emerges as the only way to survive even with high possibility of being trapped for longer to pay back the debt. Still, strategic approach may help you get reasonably priced, affordable, manageable and genuine lending deal.

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