Novuna Personal Finance won Best Personal Loan Provider at the YourMoney.com Personal Finance Awards 2024 for the 10th consecutive time.
As part of YourMoney.com‘s special award winner spotlight series, Theresa Lindsay, group marketing director at Novuna Personal Finance, shares five top tips to get loan ready and bag the best rate.
Five steps to make sure you’re loan ready
Whether you’re planning your next adventure or renovating your home, whatever’s important to you, make sure you’re in a strong position to get the best finance deal.
1) Think about affordability
Ask yourself exactly how much you need to achieve your goals and then look at your monthly outgoings to decide what’s realistically affordable for you.
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While lenders run their own affordability checks, having a clear idea of what you can afford to repay should put you in a better position when you apply for a loan, as affordability is a key factor in a lender’s decisioning.
Novuna’s loan calculator can help here. Simply enter the amount you want to borrow to get an instant idea of how much a loan could cost based on our representative APR (annual percentage rate). This can help you work out what loan amount is right for you and your budget.
2) Borrowing more may mean paying less
Most lenders have an APR-based tier system, with much smaller loans typically carrying a higher APR, while larger loans have lower interest rates. That’s because all loans have certain fixed costs associated with them, and smaller loans generate fewer earnings to cover those costs.
Look at the rates a lender is charging across different loan bands and loan terms to decide which one is best for you. Specifically, look at the total repayment of the loan over the term, as you may find that borrowing slightly more over a longer period is more affordable and gives you the flexibility to achieve what you want sooner.
3) Check your credit report
Your credit report contains all the information on any credit you’ve had in the last six years. It’s a record of how you’ve managed debt, whether you paid on time, and includes current outstanding balances. It’s updated on a monthly basis and used to create your credit score.
While every lender will have their own application criteria and scoring system, most lenders will use your credit report to help them decide on your application. So, it’s really important that your credit report provides an accurate, up-to-date reflection on how you’ve handled money in the past.
It’s a good idea to check it before applying for finance. Look out for any errors – even something as small as a typo can have an impact on your application, whereas other inaccuracies could be an indication of fraud and need investigating as soon as possible.
To improve your credit score, make sure you’re registered on the electoral roll, have some regular payments such as a mobile phone contract or utility bills coming out to demonstrate financial stability, and keep up with any existing repayments.
4) Compare APRs
Always compare APRs instead of the interest rate. This is because the APR gives a clearer idea of the total cost of borrowing including any additional charges or fees.
Remember some lenders, including Novuna Personal Finance, don’t charge any additional fees, so the APR and interest rate will be the same.
5) Choose the right lender for you
If you’re looking for a loan, always choose a reputable, Financial Conduct Authority (FCA)-regulated lender and take a close look at the lender’s online reviews.
Each full application will leave a hard credit check on your report, and lots of hard credit checks in a short space of time could indicate money worries – which is a red flag to lenders. Apply with one lender at a time, ensuring you meet its eligibility criteria before applying to give you the best chance of being accepted.
Get one step closer to your goals with a personal loan
With Novuna Personal Finance, you could borrow up to £35,000 and spread the cost over two to seven years.
Theresa Lindsay is group marketing director at Novuna Personal Finance
Novuna Consumer Finance is a trading style of Mitsubishi HC Capital UK PLC, part of Mitsubishi HC Capital Inc. It lends £2.3bn to more than one million customers each year, working with 3,500 retailers, from high street brand names to niche online ecommerce retailers.
Its loans channel, Novuna Personal Finance, has been voted the UK’s Best Direct Personal Loan Provider in the YourMoney.com Awards for 10 years running, and the business retains one of the highest customer satisfaction scores in the market.
Related: The winners of the YourMoney.com Personal Finance Awards 2024
