When you are purchasing larger items online it is normal these days to have finance options to help spread the cost of the item and pay only a small deposit in order to make the purchase.
There are lots of different versions of finance but they all have one thing in common, the application process and information used to decide if they can lend to you or not.
We work very closely with our finance partners to try and give the best possible deal and get as may choices and options as possible, and here are our top tips on applying for finance and giving you the very best opportunity of making that sofa purchase you want to make.
- Always give correct answers to the information asked for. In the modern day, finance companies can see a lot of information on your credit profile and simple things such as inflating your income can actually be the difference between passing a check or failing. So use the real time information and be as accurate as possible.
- Make sure you use the correct address. This is the address you are registered to for council tax and are on the electoral role. Finance companies need to identify you and this is a huge part of the point scoring process when deciding to lend or not.
- When giving your expenditure information there are clear differences asked for in any finance application. One sections will be regarding rent or mortgage payments. If you live with a spouse or partner you only need to declare 50% of the payment. The second part of the information that will be requested is every day expenses such as bills and food and childcare but not any other credit cards or loans etc. Again if you live with a spouse or partner you only need to state 50% of the figure and this also could be the difference between passing or failing an application.
- If you have had bad credit and things such as CCJ’s then it is unlikely you will be accepted for finance, but not impossible. Still apply but again, be as accurate as possible and if asked, state the ccj’s etc you may have or had in the past.
- If you are accepted for finance after the checks there is a time limit before the acceptance will expire. So make sure you go forward and complete the application there and then.
- A finance company wants to lend you money. It’s how they make money so if they require more information after you have applied they are trying to help you not fail you. Providing additional ID via a simple passport or drivers licence with bills in your current address and name is quite common. There is also something else called account score which requests that they be given access to your bank file so they can verify your income and expenditure. This does NOT give them full access to your account as you see it, all it does is allows them to request certain data from your digital footprint that may back up your stated figures and help them accept you. Normally this is done online via a request button and all you will need to do is click accept to give the access.
- Read the payment options carefully. There are normally several options which include 15,18 and 24 months to repay the loan but also a 3 or 4 payment option which means if you can pay the whole loan back in 4 payments the interest will be removed and you will receive a refund of the interest paid up to that point of 4th full payment. This is a great option if you can afford to do so and it is interest free.
- When you pay your deposit be aware the card used will be stored as a back up incase your direct debit fails. You can change that card by directly contacting the finance company once set up and accepted.
- You will be emailed your finance documents once you have completed the process and been accepted. Read all of the information carefully.
- You can pick the day of the month you make your first payment and this will only start once you have received your sofa. If you want extra time before you pay your first payment then try and place your first payment date at the opposite end of delivery date. For example if your sofa gets delivered on the 3rd of the month then select the 1st of the month for your payment and this means your will not need to make a payment until the month after as that date has passed.
- People with good credit files can be affected by missed payments such as a late payment for a mobile phone within the 6 months prior to your application. If you have been declined for credit but believe you have a good credit file then contact the relevant companies to see if there is something on the file that could be removed.
We hope these tips have helped you understand a little bit more about finance applications and what makes a difference. The biggest reason people are declined for finance are incorrect details. So follow the tips above and hopefully this will help you to purchase that dream sofa!!
