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Payday loans are famous in the UK, but no companies are selling such loans in Ireland. As the name suggests, these loans are repaid in a lump sum on your next payday. These loans have invited a barrage of backlash because they carry very high-interest rates. Considering the Ireland market, it does not seem that regulatory authorities will soon allow lending companies to offer such loans. However, various companies provide cash loans at the doorstep of people.

Doorstep service is quite popular in Ireland. Cash loans are generally offered between €100 and €500, so you can meet all unexpected expenses. Such loans are known as doorstep loans in Ireland. The lender representative will visit at your doorstep to offer you cash that you will pay back on the due date. This raises a question if doorstep loans and payday loans are alike. Are they in the disguise of payday loans? Is it a stratagem to make profits from gullible borrowers?

It is not surprising that the loan market is often discombobulating in Ireland. You all know that there are generally two types of loans: secured loans and unsecured loans. The former requires collateral, and the latter requires no security. However, they are further divided into categories of short term and long-term loans. It is hard to choose the right type of deal because online lenders offer various kinds of short-term loans like cash loans, emergency loans, unemployed loans, and the like. Since there are multiple types of short-term loans, and all of them have more or less the same features, doorstep loans are likely a type of payday loans. To get the answer, you need to understand both types of loans first.

Payday loans

The duration of payday loans is not more than 14 days. When you put in the application form for these loans, the lender will not run a credit check. This is why these loans come with instant approval. You can use these loans for any purpose, and on the due date, you will have to pay back in a lump sum.

If you fall behind repayments, the lender will ask you to roll over the loan. It means the repayment term will extend for another 14 days. However, you will have to pay an interest penalty and late payment fees. This is how the loan’s cost quickly adds up, and eventually, you fall in a debt trap.

Doorstep loans

First of all, the doorstep loan is not a kind of loan product. Any small loan that you get at your door service is known as doorstep loan. These types of loans are generally aimed at the unemployed, the disabled and the retired. When you put in the request for these loans, a representative will come at your doorstep.

The representative will analyse your affordability and then hand you cash to pay back on the due date. It may seem like these loans do not differ from payday loans. The only difference is you can get money at your doorstep. Wait before you conclude.

Doorstep loans are not the same as payday loans

Although they may sound like payday loans, they are not similar at all. When you apply for payday loans, it is usually your responsibility to borrow money as per your affordability. Payday loans quickly fund your needs, and hence lenders do run a credit check. They do not assess your credit file to see your payment history. They do not look at your credit file to see if you have already taken on another debt and if you will be able to manage those loans along with your payday loan.

Further, they expect you to settle the outstanding amount in a lump sum. When you fall behind the repayment date and roll over the loan, you find yourself in a debt trap. This is how payday lenders make profits.

Doorstep loans do not work that way. A representative will visit your doorstep to analyse your affordability. They will check your income records and monthly outgoings to see if you can afford to pay back what you are borrowing. Your application can be either turned down, or the lender will offer you less than what you want to borrow if they suspect about your borrowing capacity.

These loans never want you to pay back in a lump sum. The duration of these loans may vary depending on the amount you borrow, and you will pay off the debt in weekly instalments. There will never be pressure on paying back the money outright.

The bottom line is doorstep loans are not the same as payday loans. However, you still be wary about your borrowing capacity. Never borrow if you think that you cannot pay it back.

Prepare Yourself for the Factors that Affect Your Car Finance

By admin

On January 15, 2021

In Loan

Approval for car finance is easy to get, but the overall cost may very well drain your finances. People put months and years of their savings for the down payment only to get some budget-breaking instalments. The lenders try to focus the negotiation around some irrelevant factors to the loan to strong-arm even the most perfect applications.

You don’t have to be an expert in the loan process to counter the arguments of the lender. Only some factors contribute to your loan affordability and profile that needs to be taken care of.

In this blog, we have mentioned those factors that affect car finance to prepare yourself.

Credit Score

The credit score is the report card for your financial decisions and mistakes. Every missed payment and defaults for the loan are mentioned in it. The overall ratings define the risk profile of your application.

The lenders will offer better interest rates to the applicants with the perfect credit score because of less risk. They are seen as responsible borrowers among the others who often find themselves in the financial troubles. A lower credit score will hinder your chances of favourable terms to a great extent.

You can still get car finance in Ireland for bad credit with the help of private lenders. They also offer instant decisions and flexible terms. However, the interest rates may differ from the banks.

Down Payment

The down payment is an essential aspect of any mortgage or loan. A more significant down payment reduces the risk for the lenders. Therefore, they are more willing to approve the loan application.

For you, it means a lower loan amount to repay. You will save money on the overall cost of the loan courtesy of low interest paid during the loan tenure. Also, the instalments will be more manageable for the same terms.

It is recommended to wait for a few months more to increase the down payment, if possible. Otherwise, a bridge loan can help you with the down payment. Some lenders offer 12 months moratorium period to the borrowers.

Loan Term

Short- and long-term loans have a different impact on the eligibility and affordability of the loan. The long-term loans are less of a risk for the lender as the instalments seem more manageable to the borrowers. Also, is provides returns for years to the lenders.

The short-term loans are comparatively riskier because of hefty instalments each month. As a borrower, you save money because of the reduced overall cost on loan. You will have another line of credit available because of early repayment.

You must think of the instalments before the overall cost of the loan. The money saved over time is sometimes not worth the risk of default. There are repayment holidays offered in between for longer terms to help the borrowers during the financial troubles.

Vehicle Age

New vehicles receive priority for car finance because of their resale values. Expect lower interest rates and favourable terms when you opt for a new car. Which means buying a new car can save you some money on the overall cost of the loan.

The used cars may not be a popular opinion for the lenders, but they are indeed budget-friendly. You are saving a lot of money on a car in good condition that is a few years old. Comparing the two deals is not easy until you have some bias towards new or used.

Debt-to-Income Ratio

You need a regular income and a perfect credit history to become the favourite borrower for the lenders. However, the income may guarantee the loan but not the loan amount. Debt-to-income ratio determines the affordability for a loan amount.

Even some heavy paycheque lands in the rejection list because of the applied amount. You can increase the chances of approval by adding some additional income before the application. Start a side gig, work overtime, or make your spouse a co-signor to get some great offers.

To sum up, these are the most prominent factors that affect car finance eligibility and terms. You can start preparing your profile a few months before the application. By the time of negotiation, you will have a profile to get the desired terms.

Absolute ways to get the required amount in a loan

By admin

On January 12, 2021

In Loan

Humans are never satisfied with what they get because their lives, especially in this modern era, call them for struggle on so many fronts. There is a recurring need for money for countless purposes from buying a car to going on annual luxury holidays.

Not to mention, the emergency needs add bigger challenges to the situations. In such conditions, taking a loan becomes easy, but the condition is that we want a larger amount because our needs are limitless. The question is how to get an amount that you need because finance companies are rational and never cross the lending rules line.

Some suggestions can help plan better before taking a loan and obtaining approval for the desired loan amount. Have a look –

Thoroughly follow self-discipline in financial behaviour

Every single action in your personal finances can affect your chance of getting a loan amount that you actually want. Things depend on the affordability factor and to prove you are creditworthy, the personal finances should be stable, and there are some ways for that.

Do not forget the online money lenders in Ireland are always keen to see your financial behaviour in the past 6 to 9 months. You need to ensure that there is no issue in the recent past. It is about paying the bills and other debts (if any) on time.
Do not make multiple applications too many lenders at the same time because a borrower should never sound hungry for money. Sending applications too many loan companies give the same feel. It tells that the borrower is perhaps going through a money crisis, which is why he may not repay on time. Oops!
Improve spending behaviour and do not spend on things in a recurring manner that is the basic needs. When the lenders look at your bank statement, they notice how you spend money. For example – spending money extravagantly on online pizza order or expensive clothes, cause a great problem. Lenders do not like careless borrowers.

Bring an additional income in the picture (special suggestion after pandemic)

Yes, you know how things are turning upside down nowadays. The whole economy is going through a difficult time, and thanks to the third wave, that situation has become severe again. People are unemployed, and those on work from home may not look very promising to the lenders on the financial part.

Repaying capacity is the biggest concern for the loan companies, and It is better to strengthen the repaying capacity as much as possible. The factor of additional income always helps establish the fact that you can repay a bigger loan amount.
Online lenders can easily verify your income sources online, and they like to see people earning extra with their primary income. It gives them the confidence to consider your application for a larger amount.
Additional income can be anything from money through freelance work to the rental income. Normally the earning that is also passive is considered more authentic.

Apply to a lender that offers customised deals

Customisation always helps find mutual grounds for the lender and the borrower and get the best deal. It is essential to find and shortlist the loan companies that are ready to customise every loan deal.

Most of the lenders say that they offer personalised pricing, but they act stringent and intimidate the borrowers on interest rates in reality. Higher rates make you borrow less because it is challenging to prove creditworthiness for a larger amount due to expensive deals.
You need to dig deep into the internet options and check if your favourite lender actually offers customisation or not. Do you know what can be the best way of doing it? Check the lender reviews, and you will really be able to see the other side of the coin.
Go online, shop around, compare between the finance companies, shortlist and finalise. You should know that the loan lenders that take no upfront fee are generally in favour of customisation.

With the above tips, you can easily get the desired amount on your loan application. You know what, the actual need is to make the lender realise your worth as a promising borrower. This is because lending companies never miss their chance of financially stable people and keep chasing them with good deals. Besides, for people with a strong repaying capacity, loan companies are always ready to act flexibly. Now, you know the secret, next time while applying for the loan, make sure, you sound safe to the lender.

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