Category: Top Tips

5 Tips to help save a deposit for your first home

5 tips to help save a deposit for your first home

As the UK housing prices continue to climb, getting a step onto the property ladder and having a deposit for a mortgage needs a bit of thinking about. A report published by the Bank of England in December 2020 highlighted that around 75% of renters are likely to remain renting because they have insufficient funds for a mortgage deposit.

It can take up to 3 years to save enough money for a deposit – even longer if you are wanting to buy in property hotspots such as London, Brighton or Edinburgh. According to high street bank Halifax, the average deposit being paid by a first-time buyer is £59,000 although there are mortgages available that only require a 5% deposit bringing this figure to a more reasonable £13,000.

So if you are thinking about purchasing a place of your own, how can you turn your property owning dream into reality and save for a deposit that is enough in this time of rising property prices, a tough mortgage market and stagnant wages? Here are 5 tips to help you save and get a deposit together.

1. Make it automatic

Just like you set up a direct debit to pay for your heating and phone bills, do the same with your approach to saving. Savers who set up a direct debit into a separate account to come out the day they get paid will save twice as much as those that don’t. App based challenger banks such as Monzo and Starling allow their customers to round up their spending and the balance is paid into a savings pot. Savings apps such as Plum take funds automatically each week based on your spending. Make it automatic and watch your savings grow.

2. Bag the difference

Whilst in Lockdown we spent less as there was little opportunity to socialise and tempt us to spend our money. Over the course of the year many people have realigned their spending habits to reflect this change. If post lockdown your spending habits have remained muted, you have changed jobs and have a higher wage coming in, or you are working from home more and spending less on commuting then save the difference before you get used to spending it.

3. Find savings in your spending

Take a look at your monthly outgoings, including any optional employee benefits that you may be paying for but aren’t using, is there anything you can sacrifice or find an alternative cheaper option? Could you hold on to your mobile phone a little longer and switch to a sim only tariff instead of a contract? If you live in a city can you rely on public transport instead of having a car and save on the running costs and parking fees? Small savings in all areas of your spending could start to mount up and help with saving for your deposit.

4. Be incentivised

Getting the right product and making the most of any government incentive is a quick win to making the most of your savings. If you are under 40 and buying property for the first time you can set up a Lifetime Isa (Lisa). The benefit of a Lisa is that you can put up to £4,000 in it each year and get a 25% bonus from the government that is paid monthly. When you are ready to withdraw the amount for your deposit you pay no penalty. So maxing out on a Lisa and paying in £4,000 for 3 years your £12,000 investment would grow to £15,000 courtesy of the government bonus and that’s before any interest accruing.

5. Get mortgage savvy

The pandemic pulled the plug on high loan to value mortgages but in 2021 the Government announced it would provide the security to lenders in order to enable them to step up the availability of such mortgages for those wanting to get on the property owning ladder. The government’s new mortgage guarantee scheme is good news for first time buyers. More and more lenders are now offering a 5 per cent deposit scheme with the bulk of the mortgage, 80%, being guaranteed against default by the government. In addition, participating lenders must offer the option of a 5 year fixed rate product – offering the borrower the security of predictable repayments for a longer period.

Be aware of the different types of mortgages on offer and the commitment you are making. Your creditworthiness will play an important part in your mortgage application and ensuring you have a good credit score is vital. Read about what a credit score is and how you can improve it.

Despite the focus on saving for a deposit, bear in mind there are other costs associated with purchasing a property. These include Survey costs, solicitor fees, buildings insurance, Stamp Duty and initial furnishing and decorating costs. It’s important that you don’t over extend yourself. Make sure you save enough not just for a deposit but to cover these costs before you start the hunt for your new home.

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What’s a credit-builder card and should I get one?

credit builder card

If you have no credit history or poor credit score, you might find it difficult to get approved for a loan. This is because lenders don’t know whether or not you’re a reliable borrower. A credit builder card is aimed at helping people who need to build up a credit history from scratch, or improve their credit score.

How does a credit-builder card work?

 Credit-building cards usually have a high annual percentage rate (APR) and a low credit limit. This means you won’t be able to borrow a large sum of money, while the interest rate will be higher than normal on outstanding balances.

If you repay the balance in full each month, you can avoid paying any interest. Over time, this will build your credit score and make you more attractive to lenders by showing you have your finances under control.

Top tips for managing your credit builder card:

  • It’s important that you pay your card off in full every month so you don’t pay interest.
  • Avoid late payments by setting up a direct debit or you may be charged a fee and your credit limit reduced.
  • Try to use below 25% of your available credit, or it could lower your credit score (if your credit limit is £2000, use below £500).
  • If you can’t pay the outstanding balance in full, make the minimum repayment as missing a payment can damage your credit score.

How do I get a credit builder card?

You’ll need to apply for a credit builder card and get approved. Although credit builder cards are generally designed for people with low credit scores this doesn’t guarantee you’ll be accepted, so you may want to try and improve your score before applying.

Each time you apply for credit, a hard search will be recorded on your credit report. This can temporarily lower your credit score. So, it’s important to space out your applications and only make one at a time.

A good way to avoid hard checks is to use an eligibility checker that lets you see a range of credit cards and the likelihood of being accepted. It asks for a few details such as your name, address, income and financial situation, and then shows you a list of credit builder cards to compare.

Different cards will come with different interest rates and some will have added benefits. Choose the card that prioritises what you want from a credit-builder card.

Take away

It’s important to only use a credit builder card to your advantage. If you end up paying interest on your debt, it will be very expensive. This will damage your credit score even more and force you to pay more for credit in the future.

There are other ways to boost your credit score to show lenders that you can manage your lending. The key is to keep making regular payments on time and (if possible) in full to prove that you’re a reliable borrower.

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How to check your credit history

credit history

If you’re applying for a loan, lenders will want to know about your credit history. This will help them decide if you’re a reliable borrower and what terms to offer you. In order to increase your chances of being accepted for a loan and improve your credit score, it’s a good idea to check your credit history at least once a year. You can access a free copy of your report from any of the three main credit agencies in the UK, these are Equifax, Experian and TransUnion.

A statutory report will give you basic information, but you can also access a more detailed report which includes your credit score. Reviewing each section of your credit report is key to understanding what your credit history means. Here’s a step-by-step guide for checking your credit history for anything that could affect your chances of getting a loan.

Check your name and address

Lenders use your credit file to verify that people aren’t fraudulently using your identity. If your name or address contains a spelling mistake, this could affect your credit score. If you’ve recently moved house or don’t know which address is on your credit report, you should check and make sure it’s up to date.

Am I on the electoral register?

Being on the electoral register significantly improves your credit score as it provides proof of your address. If you’re not registered to vote, you could find it more difficult to get a loan. It only takes a few minutes to visit the electoral registration website and register.

Check your credit arrangements

Your credit report holds information about your past and present credit agreements from the last six years. This includes things like mobile phone contracts, credit cards, loans and mortgages. Check that each item has been authorised by you and your payments are up to date.

Close any unused accounts

Closing any accounts that you’re not using and removing any associated credit or retail cards from your file can improve your credit score.

Check your financial associates are correct

A financial associate is anyone with whom you’ve held a joint financial agreement, such as a bank account or joint mortgage. If you’re a guarantor for someone else’s loan, their credit rating or score will also affect yours as you’re promising to pay their debt if they’re unable to. Make sure you regularly check your credit report to ensure all your financial associates are correct as their financial circumstances can affect your credit score.

What should I do if I notice a mistake on my credit report?

If you’ve noticed any information on your credit report is wrong you should notify the lender or raise a dispute. It’s worth checking your credit report with all three agencies to make sure they all have up to date information. Contact details can be found on their websites.

If you’re thinking of getting a loan then checking your credit history will improve your chances of getting approved and the APR you’re offered. It’s well worth checking your credit report to ensure your information is correct and up to date.

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loans by mal offers short term, unsecured loans based on your monthly income.
Click the button to visit our loan calculator and find out how much you could borrow.

Representative 50.4% APR

Can I get a personal loan with a poor credit score?

poor credit score

A personal loan can be an ideal solution when you need to cover an unexpected expense, but many people wonder if they can get one if they have a poor credit score. While it’s still possible to get a personal loan with a poor credit score, it might make it more difficult to get your loan application accepted. It is also likely to affect the interest rate you are offered and the other loan terms. Here we take a look at why a poor credit score affects your loan application, and what you can do about it.

 

What does a poor credit score mean?

An individual’s credit score is based on information from the three major credit reporting agencies, and scores range from 300 to 999. Your credit score tells lenders how good you are with debt and how likely it is that you can make the repayments on time. A good credit score demonstrates that you’ve borrowed money and paid it back on time, therefore you represent a low risk to the lender. Because of this, lenders are likely to offer you better rates or larger amounts of money.

On the other hand, if you have ‘bad credit’ or a low credit score, this may mean you’ve struggled to keep up with debt repayments in the past. You might have a low credit score for reasons such as late monthly repayments, missing payments altogether, bankruptcy or too many ‘hard’ searches on your credit file.

You may also have bad credit simply because you haven’t borrowed in the past and haven’t had the time to build up a credit history. If you have no credit history, or what’s known as a ‘thin file’, it’s difficult for lenders to assess how responsible you are with money. Unfortunately, this in itself is a risk for lenders and it’s likely you’ll find it harder to get approved for a loan.

Some lenders, particularly those who use open banking, might consider other factors when assessing your overall ‘creditworthiness’ that are not included in your credit report. This could include things like your employment history, current income and bank account balances. While you may be able to get a personal loan based on this information, lenders will probably charge you higher interest rates than they would if your credit was good.

 

How do I find out about my credit score?

Before you decide to make a loan application, it’s a good idea to know about your credit history and your credit score. This will help you to understand how lenders will view your loan application and the terms you are likely to be offered. You can find out your credit score from online companies such as TransUnion and Experian without negatively impacting your credit history. Our article “How can I check my credit score for free”, goes into more detail about how to access this information.

You can also take steps to build your credit history and improve your credit score. This can include things like making sure you’re on the electoral roll, getting an overdraft and getting utility bills in your name. For a more detailed look at how to boost your credit score, you can read our article here. So, if you’re wondering if you can get a personal loan with a poor credit score, the answer is yes, but it might be more difficult and you won’t get the best terms available.

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Looking for more information on personal loans or boosting your credit score?

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loans by mal offers short term, unsecured loans based on your monthly income.
Click the button to visit our loan calculator and find out how much you could borrow.

Representative 44.8% APR

How can I boost my credit score?

Boost my credit score

Credit scores are what lenders use to calculate how risky it is to lend you money. They’ll look at your credit history – things like bank loans, credit cards and bills – to see how reliable you are when it comes to paying off the money you owe. Based on your score, lenders decide whether or not to lend you money, how much you’ll get and at what rate of interest. A lot of factors can affect your credit score. A low score could be because you’ve missed past payments, or it could be because you simply haven’t got enough credit history for lenders to make a decision. Here, loans by mal shares a word or two about boosting your credit score.

Check your credit history

The more you know about your credit score, the more prepped you’ll be for boosting it. Your lender doesn’t have to tell you what your score is, so it’s a good idea to know before applying for a loan, since making lots of applications can hurt your score. There’s no single, universal credit score. Each lender will use their own scoring system, but you can get a ballpark idea of your score by pulling a copy of your credit report from each of the three major credit bureaus – Equifax, Experian, and TransUnion – for free!

 

Correct any mistakes

Another advantage of checking out your credit report is that you can correct any mistakes you spot. A survey last year showed that around 10 million adults in the UK found errors on their credit files, so it’s worth checking the information is accurate. An incorrect address, record of missed payments, fraudulent credit applications or financial associations with ex partners could all be lowering your score. You can report mistakes to the credit bureau, which has up to 30 days to investigate and tell you what action they’ll be taking.

 

Make sure you’re registered to vote

Lenders search the electoral register to double check details, especially the address you’ve provided on your application. It’s important that lenders are able to rule out fraud and identity theft. Checking you’re on the register is one of the simplest ways you can improve your credit score by as much as 50 points. Although you might not be registered if you move around a lot, or if you don’t vote, not being on the electoral register is a red flag that works against your application. Not sure if you’re registered? You can contact your local electoral office or register online – it’s straightforward and it only takes around 5 minutes.

 

Make your rent, utility bills and subscriptions count

If you pay your rent on time, there’s a free scheme called the Rental Exchange Initiative that millions of private renters and social housing tenants can use to bump up their credit file and boost their rating. Launched in March 2016 by Experian and The Big Issue Group, it records your rental payments and adds them to your credit file. You can also use Experian Boost to grant Experian access to your current account information on your salary, council tax payments, utility bills, and even your subscription payments like Netflix. These can all help raise your score by showing lenders you make regular payments on time.

 

Bulk up your credit file

Around 5.8 million people have a ‘thin file’ in the UK. This means that credit reference agencies don’t hold any information on you, which makes it hard for lenders to assess if you’re a risky prospect. If you haven’t got a credit card, getting one helps get your foot on the ladder. Experian’s page of credit builder credit cards is a great place to start, but annual interest rates tend to be high, so don’t use them to borrow. An overdraft facility on your bank account also counts as a line of credit and can help to build your credit score.

 

Keep your credit usage low

It should go without saying that a lot of these credit score boosters can have the opposite effect if you go into the red. Developing good spending habits is key to boosting your score. Lenders won’t just look at your outstanding balances, but at how much credit you have available. Keeping your credit card balance below £50 can give you a boost of 60 points, while paying more than the minimum or the full amount each month lets lenders know you’re not struggling to pay off your debts. It’s worth keeping in mind that one late payment on a credit card or loan can dent your score by as much as 130 points.

 

Bear in mind that credit scores are determined by lots of factors – tackling some of these might have a fast impact on your score, but others will take a while to make a difference. It’s best to take action before you begin the process of contacting lenders, but tackling a few of these suggestions should help to raise your score within a month or two.

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Looking for more information on personal loans or boosting your credit score?

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loans by mal offers short term, unsecured loans based on your monthly income.
Click the button to visit our loan calculator and find out how much you could borrow.

Representative 50.4% APR

Consolidating debt with a personal loan

consolidating debt

As well as providing a financial boost for purchases and projects, personal loans can be used to consolidate your debts. If you have multiple debts such as credit cards and other loans, consolidating them into a single monthly payment can have several advantages. Here we look at the three main benefits and what to bear in mind when you’re thinking about consolidating your debts with a personal loan.

Streamline your finances

A debt consolidation loan lets you switch all your existing borrowing on to one loan, so you only need to make one repayment each month. This can simplify and streamline your finances, helping you to keep track of what you owe.

Reduce your monthly repayments

You may be able to save money with a debt consolidation loan by finding one that charges a lower APR than you’re currently paying. This works particularly well if you have quite a few outstanding debts gathering interest and can reduce your overall monthly repayments.

Improve your credit score

It’s easier to make one repayment every month, and doing so will improve your credit score.

Consolidating debts into a personal loan can also improve your credit by lowering your credit utilisation ratio (how much of your available credit you use), which accounts for 30% of your overall credit score, and improving your credit mix.

Key considerations

Although consolidating your debts with a personal loan can simplify the debt repayment process and save you money, it won’t make your debts disappear. If you miss a repayment, it will impact your credit score and can lead to even more debt if you use newly available space on credit cards or extend the terms of your loan. You should also bear in mind that you will have to contact your existing creditors to transfer the balance of your loans (unless your lender offers this service), and this can sometimes incur a fee.

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Looking for more information on personal loans or boosting your credit score?

Personal loans

We explain how personal loans work and what to look out for when applying

Credit score

Everything you need to know about credit scores including how to improve yours

Top tips

Top tips from loans by mal designed to help you understand your options

Borrow from loans by mal

loans by mal offers short term, unsecured loans based on your monthly income.
Click the button to visit our loan calculator and find out how much you could borrow.

Representative 50.4% APR

What are repeat and top-up loans?

top-up

Top up loans and repeat loans are a handy way of letting you borrow more money if your circumstances change. Maybe you’ve got an investment opportunity, or you need extra money to fix your car. Repeat loans and top-up loans can help you borrow the money you need, often at a better rate than you initially qualified for. Here we take a look at both top-up loans and repeat loans and the advantages they can offer.

What is a repeat loan?

A repeat loan is another loan taken out with the same lender that you applied for your first loan with, so it’s a good option when you want to stick with a lender you trust. Another advantage of staying with the same lender is that you might be eligible for lower rates. If you have repeatedly demonstrated that you’re somebody who makes on-time repayments, then you have proved to the lender that you are a responsible borrower.

Because it takes into consideration the first loan, a repeat loan is taken out once this has been paid off. Apart from that, repeat loans are processed in the same way as any other loan, you decide how much you want to borrow and make the application. The lender checks to see if you can afford the loan, and if you’re approved, they will pay it directly into your bank account. If the lender offers you a better APR on a repeat loan, you could even use this to pay off some of your more expensive existing debts at a better rate.

What is a top-up loan?

A top-up loan is also for customers who would like to borrow more money from the same lender. Unlike a repeat loan, a top-up loan lets you borrow extra money while you’re still paying off an existing loan. If you find that you need more cash, a lender will use the top-up loan to pay off and close your existing loan.

A top-up gives you a new, slightly larger loan, combining the balance due from your existing loan and the extra amount you’ve applied for. It’s a way of getting additional funds without taking on another line of credit. You can also take the opportunity to renegotiate new payment terms on your loan, so that you can pay it off faster or spread the cost out over a longer period of time. You might even be offered a lower interest rate if you’ve already made timely repayments.

Should I take out a top-up loan/repeat loan?

Top up loans and repeat loans are ways of giving you access to extra funds using the relationship you have built with a trusted lender. Because they don’t involve adding extra lines of credit, your repayments can be kept simple and manageable. The amount of extra cash you can borrow will depend on your personal circumstances, but if you’re not sure if you can afford a repeat or top-up loan, or if your circumstances might change, then they might not be right for you. At loans by mal we take your financial situation very seriously and for this reason we only offer repeat loans and only when the current loan has been settled.

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Looking for more information on personal loans or boosting your credit score?

Personal loans

We explain how personal loans work and what to look out for when applying

Credit score

Everything you need to know about credit scores including how to improve yours

Top tips

Top tips from loans by mal designed to help you understand your options

Borrow from loans by mal

loans by mal offers short term, unsecured loans based on your monthly income.
Click the button to visit our loan calculator and find out how much you could borrow.

Representative 50.4% APR

Will a personal loan affect my credit score?

will a personal loan affect my credit score

Like any other form of credit, a personal loan can affect your credit score at different stages of the process. Your score may go up and down throughout the process, but for most people, you’ll end up with a higher credit score than when you started if you make all of your payments on time.

Shopping for a personal loan

When you’re shopping around to check your rate before you apply for a loan, it’s always a good idea to ask the lender what kind of credit checks they are doing. Lenders can do a soft credit pull, rather than a hard inquiry when you provide your information to see what rate you qualify for. This doesn’t get recorded as an official inquiry on your credit report, so it won’t affect your credit score. A hard enquiry can drop your credit score by a few points each time. Some lenders, including many banks and credit unions, don’t offer a soft check with pre-qualification. If you’re just comparing rates, opt for lenders like mal that offer the soft check so your credit score will remain unaffected.

Applying for a Personal Loan

When you go ahead and apply for the loan, the lender will do a more detailed credit check, known as a hard credit pull. This will get recorded on your credit report as a credit inquiry, and can lead to a credit score drop of around 5 points for most people. That’s why it’s a good idea to check your credit score before you apply for a loan, and take any steps to boost a poor credit score. Multiple applications with different lenders, particularly within a short space of time, can negatively impact your credit score. The good news is that these credit inquiries only last a short period of time. After a year they’ll stop negatively affecting your credit score, and after two years they’ll fall off your credit report entirely.

Repaying Your Personal Loan

Developing a record of consistent, on-time payments toward your debt helps build credit in the long term. Payment history is the biggest factor in your credit score, accounting for 30% of the overall score. As you make your payments, you’re most likely to see the biggest boost in your credit score. However, it’s important to make sure your repayments are on time. While missing a due date by a few days will not affect your credit, payments toward your personal loan that are more than 30 days late may be reported, and can damage your credit score. The amount you are overdue and the frequency can also lower your score.

As time passes, these late payments won’t keep your score down quite as much, especially if you make the rest of your payments on time. This is why it’s important to develop good budgeting and saving habits, and to consider putting your personal loan payments on auto-pay. If you are using your personal loan to consolidate debts, this can also help improve your credit rating.

Contact mal - consumer credit lender

Looking for more information on personal loans or boosting your credit score?

Personal loans

We explain how personal loans work and what to look out for when applying

Credit score

Everything you need to know about credit scores including how to improve yours

Top tips

Top tips from loans by mal designed to help you understand your options

Borrow from loans by mal

loans by mal offers short term, unsecured loans based on your monthly income.
Click the button to visit our loan calculator and find out how much you could borrow.

Representative 50.4% APR

How can I check my credit score for free?

how can I check my credit score

When you apply for a loan, the lending company will use your credit score to decide if your application gets approved, how much they’ll lend you, and what rate of interest you’ll have to pay. The three main credit agencies in the UK are Equifax, Experian and TransUnion – these agencies hold a credit file on you, containing information on your borrowing and repayment history, which they use to produce your credit score. There’s no universal credit score because each agency uses its own system to work out a score.

A lot of things can affect your credit score, so it’s a good idea to take a look at your credit report before you apply for a loan. This means you can correct any mistakes and take steps to boost your score if you need to. The law gives you the right to request a free one-off statutory credit file from any or all of the agencies every year.

A Statutory Report can be useful if you just want to check your credit history as it stands. Alternatively, all three credit agencies offer unlimited access to your record and score, with alerts that allow you to monitor any changes as they happen – handy if you need to know how taking a certain action has affected your score and how quickly. But how can I check my credit score for free? Alternatively, you can get your hands on your report and score for free for as long as you like – here loans by mal takes a look at how.

Experian

  • Paid: CreditExpert service £14.99 per month
  • Free: By signing up to the Money Saving Expert Credit Club, you can access your report and score forever. You’ll also get a personal assistant to find you the right product and a Wallet Workout tool that can tell you which credit products could save you money.


Equifax

  • Paid: Full credit monitoring service £7.95 per month
  • Free: You can get your Equifax report and score free for life through ClearScore. The service also lets you compare credit cards and loans, plus ramped up monitory services to detect signs of fraud.


TransUnion

  • Paid: CheckMyFile service £14.99 per month
  • Free: You can access your TransUnion report and score for free via its Credit Karma service. This also advertises loans and cards you’re likely to be accepted for.


What’s a good credit score?

You might think that credit scores fall into the same ‘good,’ ‘fair’ and ‘not a chance’ categories for all credit agencies, but you’d be wrong. Because each agency uses different criteria, what counts as a good score can differ by quite a bit. Check out the chart below for comparisons.

CRAExperianEquifaxTransUnion
Maximum score:999700710
Very poor:0-5600-2780-550
Fair:721-880367-419566-603
Good:881-960420-466604-627
Excellent:961-999467-700628-710

Checking your credit report and score can give you useful insights into your spending habits and help you to develop better budgeting strategies as well as boosting your score. A good credit score will unlock the best rates on things like insurance, rent and mortgages as well as lots of other perks.

Contact mal - consumer credit lender

Looking for more information on personal loans or boosting your credit score?

Personal loans

We explain how personal loans work and what to look out for when applying

Credit score

Everything you need to know about credit scores including how to improve yours

Top tips

Top tips from loans by mal designed to help you understand your options

Borrow from loans by mal

loans by mal offers short term, unsecured loans based on your monthly income.
Click the button to visit our loan calculator and find out how much you could borrow.

Representative 50.4% APR

What are the different kinds of personal loans?

different kinds of personal loans

Thinking about a personal loan but don’t know your fixed rate from your variable? The difference between secured or unsecured? Don’t worry, you’re not alone. Here, loans by mal takes you under a sturdy wing to guide you through the jargon.

Secured or unsecured?

Is the number one question.

A secured loan works by borrowing against the value of something you own, such as a car or a house – also known as collateral. If you can’t make your repayments, then the lender can sell your collateral to get their money back and give you what’s left. Because it’s less risky for the lender, you’ll often pay a lower rate of interest and you might get approved for a larger sum. The downside is that you could lose your home if you can’t repay your loan, plus lenders will sell to get their money back, not to get you the best price.

Unsecured loans, on the other hand, allow you to borrow without having to put up any collateral. Because there’s more risk that the lender won’t get their money back, interest rates can be higher and you might not get as much money as with a secured loan. Unsecured loans are likely to use your credit score to estimate risk to the lender.

What’s a guarantor loan?

It’s a type of loan you take out with someone else who agrees to pay your debt if you can’t. This person is called a ‘guarantor’ and they’ll usually be a friend or family member. A guarantor loan is a type of unsecured loan since neither you nor your guarantor puts up any kind of collateral.

Guarantors help reduce the risk to the lender, so they could be a good alternative

for people with a poor or limited credit history who might struggle to get a loan. Bear in mind that if your guarantor gets stuck paying off your loan, you might not be on their Christmas list.

What’s the difference between a variable interest loan and a fixed loan?

Simply put, with a fixed-rate loan the interest stays the same throughout the borrowing period, regardless of the economy or any other factor. With variable rate loans, the interest rate can go up or down depending on market conditions. This question crops up with bigger loans that you’ll be paying off for longer, like a mortgage.

With a fixed rate, you’re able to see how much you’ll pay each month and the total you’ll pay overall, which can make budgeting easier. A variable interest loan is more of a gamble – while you might benefit if interest rates drop, you’ll pay a higher rate if they rise, meaning that it can be harder to budget.

What’s a debt consolidation loan?

A debt consolidation loan rolls up all your debts into one, ideally with a lower interest rate and a speedier payoff time. Having fewer payments to juggle and saving on interest can simplify your finances and help you pay off debt. On the downside, you could end up in more debt if you go on a spending spree with freed up space on your credit cards.

What’s a payday loan?

Payday loans are short-term loans originally designed to tide people over until payday. Normally you’ll have until your next payday to pay back your loan plus interest, although these days some payday lenders will let you choose the repayment period. What all payday loans have in common is that they’re high cost, short-term, and often for small amounts. Although a payday loan can seem like a quick fix when you’re strapped for cash, they can quickly trap you in a cycle of debt if you can’t afford to pay back on time.

What’s APR?

Read our article here.

We’re not a payday loan company and you won’t need a guarantor to be approved for a loan with us. loans by mal offer unsecured loans up to 1 month’s income, helping with one-off purchases and unexpected events.

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Representative 50.4% APR