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Getting A UK Loan Quote
By: Gordon Goodfellow
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The UK banking system may be thought of by many as archaic, a bit Dickensian, and in many ways it is. But there are several ways of going about getting a UK loan quote. Here is a summary of the main ways, and the pros and cons of each.
Getting the UK loan quote from your own bank is the most obvious way. After all, your bank will know you because of your previous banking relationship. It may be that your bank is quite near to your or a short drive away. You may have set up a telephone banking system with them or even an online version of that. The people there will know you, as long as staff turnover isn't too high.
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The obviously bad side of this is that getting a UK loan quote from your own bank means that you will be tied in to whatever conditions the bank has as far as its own lending is concerned. In particular, you will be charged whatever prevailing interest rate the bank sees fit to charge. So rather than just nip into your own branch and smile at the people who know you it would be a better proposition in the long term if you were to look around for a better deal elsewhere, even if it took a bit of extra time and effort on your part.
So the next possibility is getting a UK loan quote from someone else's bank. The high street banks are all in competition with one another, after all. They will try and outbid each other as much as their own coffers can afford. Look for the best deals going. Banks nowadays are not the conservative institutions that they used to be, and you will see posters both outside and inside their branch offices telling you specifically the interest rates they charge.
The downside of this is that you will be dealing with a bank that does not know you. Dealing with your own bank may mean that you have a certain amount of negotiating power, especially if you have a good credit record with them. In negotiating the loan quote with them you will not have the leveraging ability that you would normally have with your own bank.
The next alternative is a broker. Rather than getting a UK loan quote from a direct lender (i.e. a bank, which is lending you their own money directly) a broker will have access to several different lenders, for which he or she gets a commission. This vastly increases the number of options available to the borrower. It also massively improves the borrower's chances of getting a loan in the first place, especially in the case of a bad credit record. The bad side of this is lack of impartiality. You would never know how independent the broker is, or whether or not the brokerage is tied to a specific group of lending companies.
So the path that gives you the most flexibility is to go the whole way and deal with a large panel made up of brokers and direct lenders. The borrower will have all the benefits of dealing with several brokerages that are both independent and tied. The chances of getting that loan will also be greatly increased in the cases where the borrower's credit history has not been good.
This last option will be even better as it is also the easiest. Broker panels exist online. Borrowers can apply for a UK loan quote easily just by filling in a simple online application form. So the UK lending system isn't so archaic after all!
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