Apply for a secured loan when you have a good credit score and a stable financial situation, as this can help you qualify for better interest rates. The average credit score in the UK is 383, according to Experian.
Avoid applying for loans during periods of economic uncertainty or when interest rates are high, as this can make it harder to secure a favourable rate. The Bank of England base rate, which influences secured loan rates, was 4.25% as of August 2023.
Consider waiting until you've built up a larger deposit or paid down existing debts, as this can improve your loan-to-value ratio and help you qualify for lower interest rates. The average deposit for a first-time buyer in the UK is £62,612, according to Halifax.
Be aware of seasonal trends in the lending market, such as increased competition in the spring and summer months, which may offer opportunities to secure better rates. Mortgage approvals in the UK are typically highest in the summer months, according to the Bank of England.
Plan ahead and start researching loan options well before you need the funds, as this can give you time to improve your financial situation and find the best deals. The average time to complete a mortgage application in the UK is 6 weeks, according to Mortgage Solutions.