Getting Approved for a Personal Loan – It’s Simple Maths Really

personal loansMany British consumers would love the privilege of borrowing a personal loan to make important purchases. Some would even like to borrow money to put away in a savings account for the future. Maths is one of the most important components in any financial process. Without using the elements of maths, a person could be under the false presumption that he or she does or does not qualify for assistance. The following is an explanation of how a UK consumer can use simple math to figure the likelihood of receiving a personal loan.

Calculating Disposable Income

The first step in applying for a personal loan is calculating whether the person has the money, you can use a personal loans calculator to help with this. Completing applications for a personal loan without having the ability to repay the advance would be detrimental to the consumer even if the bank did not notice the lack of financial competency. The way to avoid an embarrassing situation is to take a few minutes to calculate disposable income.

A consumer can quickly calculate his or her disposable income by subtracting total household bills from total monthly income. When calculating this figure, one should be certain to use all sources of income as well as every bill that needs payment on a monthly basis. The figure left from that calculation is called disposable income. This figure allows a consumer to see the amount of money that he or she has available for creditor bills and survival.

Credit Score

Credit score is another number that can affect a personal loan. A low credit score can have a negative impact on a provider’s decision. A consumer can obtain a free credit score in the UK by signing up for a 30-day trial of credit monitoring software. The program gives the person instant access to the data that he or she needs, and the person can use the data to improve his or her credit rankings. Personal loan companies are more likely to approve a person with an excellent score than a person with a poor rating. Therefore, the consumer should take steps to increase the score before applying for loan products. To increase a credit score, one can pay debts, cease using credit cards, and make fewer random credit inquiries.

Personal Loan Interest Rates

The next step the consumer will want to make to ensure that he or she can handle a personal loan is searching for loans with reasonable rates. The interest rate attached to a consumer loan product can sometimes be so high that it breaks the person before the loan period ends. A person who desires to take a personal loan will want to use a comparison tool and a calculator to find out the best rates for personal loans. The comparison tool gives the person the list of the most flexible providers, while the calculator allows the person to see the amount of his or her payments over the course of the loan term.

Once the consumer has the knowledge and can see an overall picture of life with a personal loan, he or she may proceed and complete an application with a lender.