5 Tips To Borrowing Money.

Hi everyone thanks for joining us today
this is the first of what we hope to be a series of fireside chats for TSB
and today we are joined by Nick Smith our Head of Loans. Thank you Nick for joining
us today and Nick’s gonna be just sharing his
tips on personal loans. So Nick lovely to have you with us. One of my first questions was, thinking back to
my childhood you think you want to be a doctor or a
lawyer or a fireman or Beyoncé how did you get into loans? Sort of by accident. I graduated in maths and I was really interested in business and numbers and joined a bank, worked in a few different
roles and before you know it I just had passion for lending and helping
people to be able to borrow and buy the things they want and get themselves out
of debt as well so it’s just something I’ve really
enjoyed. Could you describe just for those of us, when you go to visit your bank there’s quite a lot of terminology that consumers don’t always quite understand, what do you term a personal loan? OK so a personal loan is really
different from a credit card or an overdraft in one really important way.
You borrow once you borrow a fixed amount and you repay over a fixed term. What that means is you know exactly how
much you’re going to be paying and exactly when you’re going to be debt
free. The reasons people might take out a loan
can really vary so most people it’s a car it’s home
improvement or maybe something like a wedding. Or the other big
reason is when people are already in debt they use it as a way to get themselves
out of debt so they can take everything they’ve borrowed put in one monthly
payment and know exactly when then are going to be debt free. How does a personal loans actually work? A personal loan is quite nice and straightforward really. That’s the whole idea so what you
need to know is how much money you need to borrow. The other main thing you need to know is how much you think you can afford to repay
each month and with those two bits of information you can set up a loan that
will allow you to buy the car of your dreams whatever
it may be and and pay it back gradually over time. And is that advise that your bank gives you? Who do you go to for a personal loan? Well I think it’s always worth talking
to your own bank about a loan but more and more these days is really worth
shopping around as well and that’s to find the best deal your own bank won’t always give you the
best deal. So what do I mean when I say shopping around well there are lots
of different options. Price comparison websites online but you can do other things like you know get your Sunday newspaper out have a little
look at who’s in the best buy tables there to see who’s offering the best
rates. How will I know what I’m paying for when
I take out a loan? So the most important thing when you start taking out a loan is to figure out exactly what you’re being offered and
exactly how much it’s going to cost you. You’re not alone, this confuses a lot of people. So when you’re shopping around the first
you’ll see a thing called a representative APR or rep rate it
sometimes gets referred to us. That’s the rate that lenders have to
advertise but it only means that 51% of people will get that right
so nearly half of people actually be offered a different interest rate. So what I always recommend to anyone I
speak to is to make sure you prioritise going to lenders who offer what’s called
a quotation search or soft search. What that is is it takes some of your
details and it can tell you your personalised rate that you’re going to
pay so you know exactly what you’ll pay over the life alone but it does it
before you fully apply and that means that search finding out that information doesn’t leave a credit footprint and
can’t do anything to harm your own credit rating. And when you footprint is that connected with your credit rating? Yeah, so what your credit rating is is
basically it’s a big a big track record of everything you’ve done. How much you’ve borrowed whether you’ve paid it back whether you’ve missed any payments whether it’s gone you know really bad and you have to have
a debt completely written off or gone bankrupt and even small
things like a credit search can impact that because if a lender
sees that you’re applying for lots and lots of loans they might be a little
more concerned about lending to you then if you’ve been sensible and shopped
around and just applied for one right. Thanks for all the tips you have and I
guess if people want to find out more information we put all the links below but on TSB’s website where could they
go? Yep TSB.co.uk/loans is a great resource we’ve got loads of information on there about loans for all
different purposes. So that’s it from us, thank you very
much for joining us. If you have questions on any of
the subjects that we’ve talked about today or things that we didn’t cover please do leave a comment below and I’m sure Nick will support us in answering some of your questions and of
course if you want to keep in touch with us and see more of the fireside chats
because there’ll be a lot more to come please subscribe to our YouTube channel
but other than that thank you so much for joining us and see you soon.

2 comments on “5 Tips To Borrowing Money.”

  1. TSB says:

    Is there anything that we didn't cover? Let us know if you have any questions.

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