What to Consider Before You Apply

At The One Stop Money Shop, we encourage applicants to take their time when applying and make sure that they understand everything key about the loans we offer. For any further questions, you can contact us directly or visit our FAQs page. Here are some of the key things to consider before you apply:

How much do you need to borrow? 

One of the most common things for most customers is trying to apply for the maximum amount possible, and our maximum allows you to borrow £1,000. However, it is important to estimate beforehand exactly how much you need to borrow, taking into consideration your emergency expense, outstanding bill or reason for needing a loan in the first place.

You will be paying interest on any amount that you borrow, so taking out the highest amount is not always the most cost effective. So it can be worth making a list of your expected income and expenses over the next few months and determining the right amount to borrow accordingly.

How long do you need to borrow for?

The One Stop Money Shop offers loans that are repaid over 6, 9 or 12 months, giving you the flexibility to choose and borrow over the loan duration that you need. Again, the longer your loan term, the more interest that you will be paying on your overall loan sum, so it is helpful to outline your income and expenses and decide how long you will need the loan for. It may be worth adding an extra month or two, to give you some extra breathing space in case another financial emergency pops up.

Even if you borrow for longer than necessary, you still have the option to repay early, at any point and there will not be any added fees for doing so. In fact, you may save money because less interest in accrued overall.

one-stop-money-shop

Do I meet the criteria? 

The criteria for applying for a loan with The One Stop Money Shop requires applicants to:

  • Be over 18 years of age
  • Full-time UK residents
  • Employed and earning a minimum of £500 per month
  • Valid debit or current account
  • No recent CCJs or IVAs
  • Able to afford monthly repayments

Can I afford it? 

Our repayment examples are designed to give you an indication of how much you will be paying for you loan and how long. In fact, you can use our calculator here to try different loan amounts and durations. Therefore, it is important to think about how you will be able to repay your loan and whether you can afford it. 

Representative Example: £500 loan repayable over 12 months £81.25 per month total amount payable £975.00. Representative 295.60% APR

Will you be using your income? Are you expecting a bonus from work? Will you require another loan to repay this one? You want to be in a position where you can afford to repay your loan and not fall behind on repayments – since this could incur late fees and damage your credit score. If you find that you need to borrow another loan to pay off your original one, this can lead to an unhealthy cycle of debt.

Implications of non-repayment? 

Understanding the consequences of missed repayments is vital if you find that you are unable to keep up with repayments.

Our dedicated team will always try to assist with you lower repayment plans or by helping you delay repayment, however, missed repayment can lead to added late fees and a negative impact to your credit score. The default fee charges will never exceed £15, since this is enforced by the Financial Conduct Authority.

If you find that you are not going to be able to make your next repayment, you should get in touch with our team at your earliest convenience.

Have you considered alternatives? 

Before applying for online finance or quick loans, it is always good to consider any other alternatives. This includes borrowing money from family and friends (since this is likely to be free of interest), selling old unwanted goods through online apps or car boot sales or using a credit union where interest rates are significantly lower.

The One Stop Money Shop is passionate about responsible lending and treating customers fairly and we encourage customers to avoid rushing into an online loan agreement and exploring all suitable options beforehand.

How Do Credit Checks Work?

The approval of our loans will typically be subject to a credit check and this will help determine your eligibility. Every individual in the UK receives a credit score and will have a credit file when they turn 18. When carrying out a credit check, the lender is able to review your file and get an indication of your financial history including past loans, credit cards, outstanding bills, current address and more.

If you have a bad credit history, this will likely impact your chances of approval. However, if you have a good credit history and strong record of past repayment, this will maximise your likelihood of being accepted.

The One Stop Money Shop carries out credit checks using Equifax to ensure that customers can afford to repay their loan without falling into financial difficulty. Carrying out credit checks is a requirement of the Financial Conduct Authority prior to funding every loan and is key to lending responsibly.

Accesses data from a credit reference agency 

credit-reference-agencies

Your credit file is held by the three main credit reference agencies in the UK of Experian, Equifax and Call Credit. Every time a lender conducts a credit check on your account, they are paying a small fee to one of the credit agencies in order to access this information. Some key information from credit reference agencies includes:

Updated in real-time: Your credit information is updated automatically and this is very important to other potential lenders. So if you are making numerous loan applications in a short space of time or have recently been funded for multiple payday loans, this information will be updated immediately and be made available by other prospective lenders who will use this information to make informed decisions. Naturally, if you have just been granted numerous short term loans and are continuing to make applications, future lenders may be hesitant.

Recent payments: Your information on recent payments will be recorded and is made accessible via credit reference agencies. So if you have made a recent repayment on time for a financial product, this will improve your credit score or keep it strong and healthy. Equally, if you have just missed a repayment and are in arrears, this information will be made available to future lenders.

Outstanding debts: Any future creditors will be able to see what outstanding debts you have available. It is very normal to have loans or credit cards open, especially mortgages, since these can last 10 or 25 years. It is the role of the direct payday lender that you have applied with to determine your affordability and how much you can borrow without falling into default.

How lenders use your credit information 

Lenders will look at your information and determine if you are eligible for a loan. From their perspective, they want an indication as to whether you will be able to repay on time and the lender can make back their investment. The One Stop Money Shop will use a credit check to confirm:

  • Your eligibility
  • The amount you can borrow
  • How long you can borrow for
  • Interest rate and potential risk of default

Credit checks leaves a footprint 

When you apply for a financial product such as a loan or credit card and a credit check has been run, it will leave something on your file known as a search footprint. This is a like a mark or stamp on your file to confirm that someone has looked at your file.

search-footprints

It is important because having too many search footprints within a short space of time can make you look financially stretched or desperate for cash – or equally a potential victim of fraud if someone is applying for finance in your name. It is normal to have around 12 search footprints at any time and they will usually disappear automatically from your file after 12 months.

Some financial products and eligibility checkers will use something called a ‘soft credit search’ and this means that it checks your file and disappears immediately after. This is commonly used by brokers and loan matching tools where there is no obligation.

Check your credit file 

You can see who has run a credit check on your file by accessing your credit report. This is available for you to see when you sign up to a service provided by the likes of Noddle, Experian or ClearScore. There are usually free trials available and thereafter it costs a few pounds per month. Checking your file regularly can be useful if you have been a victim of fraud and want to keep on top of things or you are proactively trying to improve your credit rating and want to monitor the score regularly. You can also receive a one-off statutory credit report for £2 via the government.

Improve your credit score 

If you are worried that a credit check will show a history of missed repayments, you can do some essential things to improve your credit score. If you are young and starting out in the world of personal finance, you should join the electoral register which is free and this will confirm your address with the local authorities, something that adds credibility to your credit profile. You should also consider closing down any credit cards and store cards that you do not use and trying to get into the habit of repaying any debts, bills and loan repayments on time each month. Read our guide here on how to improve your credit score.