How to get a loan in the credit crunch

26 August2009

Over the past two years or so, borrowing money - whether it`s a personal loan or a mortgage - has been a lot more difficult than it has been in recent years.

After years of high levels of lending, lenders became concerned about the amount of (potentially) `bad debt` in the economy - and reined in their own lending.

Because of this, many people believe that they simply won`t be able to get a loan. However, this is not true - finding a loan may still be possible, if you go about it the right way.

How to improve your chances of getting a loan

There are a few things you can do to improve your chances of being offered the loan you`re looking for.

Be realistic

The interest rate you are likely to be offered - and your overall chance of being accepted - will depend largely on your credit history. It`s reasonable to assume that if you have always made payments on time in the past, you will have a good credit history, whereas if you have missed payments in the past, your credit history will be poor.

With that in mind, consider your loan application carefully. If you have struggled in the past, you may have more success with a lender that specialises in loans for people with a bad credit rating.

Also, think carefully the type of loan you want. Secured loans may be easier to obtain than unsecured loans, since your home is placed as security against the loan - but remember that if you miss payments, there`s a chance your home could be repossessed.

Check your credit report

Your credit report shows how you`ve handled your finances in the past (usually over the past six years). Lenders can look at this information when they`re considering your application, so it`s well worth obtaining a copy so that you can check everything is up-to-date and correct.

If there is any incorrect information on your credit report, your chances of getting a loan could be affected - but you have the right to apply to have it corrected.

Your credit report can be obtained from any of the UK`s three credit reference agencies: Equifax (, Experian ( and CallCredit (

Pay down existing debts

If you have any outstanding debts - such as credit cards or overdrafts - your application for a new loan could be affected, since lenders might feel these could affect your ability to cope with any new debts.

It`s worth repaying as much of this debt as possible to improve your chances of being offered a new loan.

Besides, if you already have a lot of debt that you can`t clear, you should carefully consider whether it`s a good idea to take on another loan.

Speak with a professional loans adviser Searching the market for the best loan deal can be time-consuming, so it`s worth speaking with a professional loans adviser. They can point you in the direction of the right deal for you, based on your circumstances.

If you`re looking for a loan, click here or speak to one of our expert loans advisers today on 0800 195 2910.

Fill in our form for your free loan quote

About your loan
Your information
By continuing, I agree to the privacy policy

Tags: loan, loans, credit crunch, recession, getting a loan, get a loan, how to get a loan, find a loan, get loan

Fees payable when continuing service is provided. Repaying debt over a longer period may increase the total amount to be repaid. Calls are recorded and are usually free from UK landlines. Mobile phone users may be charged and should check with their service provider. Cards are provided by third parties and are subject to eligibility, status and terms and conditions. Applicants must be UK residents aged 18 or over.

All About Money Limited © 2013. All rights reserved. 42 Boston Rd, Sleaford, Lincolnshire NG34 7ER.