Nobody has ever applied for funding of any kind with the goal of getting a bad deal. Even so, you cannot always be confident that you have walked away with the best possible deal for your requirements.
That is, unless you take a strategic approach to the product selection and application process.
Essentially, there are four things anyone looking to get a good deal on finance this year (or any other year) needs to do. Each of these can play an equally important role in ensuring you get the best possible deal, irrespective of the type of funding you apply for.
- Enlist Independent Broker Support
Hiring a broker is not only about streamlining and simplifying the application process. It is important to remember that many specialist lenders offer their services exclusively by way of broker introductions. This means that the products and services they offer are not provided directly to customers. The only way to access their loans, mortgages and bespoke funding solutions is to apply through a broker.
This should therefore be the first thing you do when applying for funding of any kind, as it is necessary to conduct a genuine whole-market comparison.
- Look Beyond Interest Rates Alone
A common mistake made by private borrowers and commercial customers alike is placing a heavy emphasis on interest rates. True, a quoted monthly interest rate or APR is a big deal and will have a major impact on the affordability of the loan. But this will rarely be the only cost attached to the facility and may not even be the biggest cost incurred. There are also things like administration fees, arrangement fees, legal fees, completion fees, early exit fees and other fees to take into account.
These additional charges could add up to anything from 1% to 5% of the total value of the loan. Request a clear disclosure of exactly how much you will be paying for the facility you are applying for and ensure that all borrowing costs have been carefully considered.
- Don’t Be Afraid to Negotiate
It is up to the applicant to present a strong enough case to convince the lender they are safe and suitable for funding. Even so, the customer is still the most important party in the transaction and the customer is always right…as they say. A good lender will always be willing to demonstrate a good deal of flexibility, where product terms, conditions and repayment requirements are concerned. One thing that should always be open to negotiation is the overall price of the facility you are applying for.
If you have seen a better deal advertised elsewhere, ask them to match it. If the deal they have offered you is not quite within your budget but is almost there, ask for a rate reduction. The worst they can do is say no, but there is a good chance they will say yes.
- Present a More Convincing Case
Applying for a loan should never be seen as a binary ‘accept or reject’ scenario. It is worth remembering that the strength of the application you submit will have a major impact on the affordability of the facility offered. 10 borrowers applying for the same loan may all be accepted, but may be quoted completely different interest rates and borrowing costs, based on the strength of their applications.
This is where things like good credit, proof of income, evidence of a workable exit strategy and experience in the field you operate in can make all the difference. None of these things is strictly necessary to qualify for funding, but will always pave the way for a more competitive deal.
For more information on any of the above or to discuss the benefits of the financial services we offer in more detail, contact a member of the team at bridgingloans.co.uk today. .