Well, this is an interesting question to put up here but the reality is that most of the individuals are confused about that and the reason is BREXIT. Yes, as the delay in Brexit is going on, the UK people are more worried about their financial situations. They worry about their employment, their financial future and the options regarding the loans. Now, when it comes to loans, it has been found that the traditional financial institutions like the banks seem not interesting to amend their lending policies. It may worry some people. The ball is now in the court of direct lending marketplace, which is growing rapidly especially for the last couple of years.
Here, we are not taking the favour of the direct lenders but the discussion is going on the utility. Banks have their own importance and still they are the most preferred choice in terms of finance. The direct lenders have made their own recognition, as they have come up as the alternative of the conventional lenders. They are more flexible to their lending policies and they can accept the loan applications of almost every individual if he has a guarantor to apply for guaranteed loans or does not have any guarantor.
Another thing in which these lenders score high is the less numbers of obligations involved in the lending process. Let us discuss a few examples here.
These are the secured loans in which the repayments are assured through the third party called the guarantor. The person, who acts as the guarantor, has to take a responsibility of making the repayments if the main borrower is not in the condition to do so. People, when they are applying for these loans, can ask for the large amount to borrow because they can convince the lender with guarantor’s signature.
You can use the loans for varied purposes, such as:
- Home improvement or buying a new home
- Purchasing a new car
- Improving the credit scores
- Educational expenses
In such loans, both the traditional lenders and the modern loan providers can ensure low interest rates, as they are assured with proper repayments either from main borrower or from the guarantor. However, before applying, you should keep in mind that your guarantor should have a good credit score and a stable employment status.
What if you do not have a guarantor?
In this scenario, one can understand the importance of the direct lenders. The numbers of UK people with bad credit score are extremely high and finding out the guarantor on a quick basis is almost difficult for them. There is always a chance that the banks may not show interest to their loan applications but the private lenders have even make specialised deals such as loans without guarantor.
These sorts of loans do not need any guarantor to co-sign the loan agreement and largely applied during the financial emergency. Remember, these are only the short-term loans and the rates of interest might be on the higher side. If you still need a large amount to borrow but do not have a guarantor, you can convince the lender with pledging any collateral equal to the borrowed sum. Here, you can also calm down the interest rates. The applications come in large numbers on these loans just like the direct lenders are receiving on the bad credit loans or no credit check loans.
Can We Trust Blindly on Direct Lenders?
The direct lenders are useful as the alternative to the banks but not all lenders are true to their promises. They usually advertise their products as such but later, the borrowers feel regret as they have to pay unnecessary charges. But there are a few reliable direct lenders in the UK, like First Choice Finance, which have been able to maintain a good record of helping people in their adverse financial circumstances.
It would be better for you to do research first for which you can go to online route. Compare the prices of varied lenders and then decide a deal that can go with your prevailing financial circumstances.
The delay in Brexit is obvious and anyone living in the UK knows the reasons for it. Trusting the direct lending marketplace can be fruitful in this scenario and carefully managing the finances becomes equally significant.