FAQs

Our Services

What do you do exactly?

We make searching and applying for loans as efficient, simple and accurate as possible. In short:

  • we can determine the actual interest rate you will pay based on your personal circumstances
  • we have partnered with lenders to give you these accurate quotes before you actually submit your application to them, so your credit rating is not affected
  • if you apply, we will send your details to the lender so you don’t have to re-key any information
  • the lender will contact you to discuss next steps
  • we can also provide you with advice regarding our lenders range of second charge mortgages.

How does it work?

Our lending partners have shared with us the rules they use to determine the rates you get. We can then use credit information provided by Equifax and the details you provide in your application to give you an accurate quote on the lenders’ behalf.

We initially do a quotation search which has no impact on your credit rating. If you do decide to apply for a loan then the lender may leave a hard footprint.

Do you offer payment protection insurance?

It is important that you are able to maintain your payments should anything happen to reduce your regular income. We do not offer insurance therefore we would suggest that you seek independent financial advice before making a decision. The Money Advice Service are an independent service set up by the government and they offer free, impartial advice. They can be contacted on 0300 500 5000 or their website can be found at https://www.moneyadviceservice.org.uk

Do you leave a credit footprint?

We use leading credit reference agency Equifax to provide us with ‘soft’ credit searches that do not impact your credit rating. The ‘soft’ footprints left by our free quotation search can only be seen by you. No one else can view this activity on your credit report. If you decide to make a formal application for credit, then your lender may impose a ‘hard’ footprint on your credit file in response to this.

Do you charge for your service?

The lenders pay us commission upon completion of the loan.

On second charge mortgages there will be a broker fee for processing the loan. This fee is included in any quotes we provide to you. This fee covers the cost of a property valuation, a reference from your mortgage company and any administration and legal costs. Our advisers will discuss the broker fee with you and whether you wish to add it to the mortgage or pay it upfront. Please click here for more information about our Second Charge Mortgage Services.

Next Steps

Why am I not eligible for a loan?

For both unsecured loans and second charge mortgages, lenders will first look at your credit history and how you have conducted your previous and current credit or loan accounts.

Then, they must consider affordability, which, put simply, means the lender must decide if you can afford the loan based on your income and outgoings.

For second charge mortgages (which by their nature are secured against property), they will also consider the equity in the property against which the mortgage is secured. This equity is the difference between the value of the property and the outstanding first charge mortgage balance.

Based on the areas of credit history, affordability and equity (for second charge mortgages only) the lender makes a risk assessment of how likely is it that the borrower will repay the loan. If the risk is too high, the borrower will be declined for the loan. If the risk is acceptable, then the lender will (subject to other minimum requirements) make a loan offer. We cannot provide you with individual reasons for applications not being accepted.

What happens once the loan application has been submitted?

For unsecured loans, you will either be transferred via the telephone directly to the lender or they will usually contact you within 24 hours to make the final arrangement for processing your loan.

For second charge mortgages, one of our mortgage advisers will contact you within the next 24-48 hours to talk you through your options and quotes and what the next steps are. Once we have received all the related paperwork and an acceptable valuation of the property, your application will be passed to the lender for their final underwriting checks prior to completing your mortgage.

If your question or issue is not answered here, you can still contact us.

Our Guides

How do lenders decide which applications they will accept?

For both unsecured loans and second charge mortgages, lenders will first look at your credit history and how you have conducted your previous and current credit or loan accounts.

Then, they must consider affordability, which, put simply, means the lender must decide if you can afford the loan based on your income and outgoings.

For second charge mortgages (which by their nature are secured against property), they will also consider the equity in the property against which the mortgage is secured. This equity is the difference between the value of the property and the outstanding first charge mortgage balance. 

Based on the areas of credit history, affordability and equity (for second charge mortgages only) the lender makes a risk assessment of how likely is it that the borrower will repay the loan. If the risk is too high, the borrower will be declined for the loan. If the risk is acceptable, then the lender will (subject to other minimum requirements) make a loan offer. We cannot provide you with individual reasons for applications not being accepted.

How is the loan rate determined by lenders?

Assuming a loan offer is made, the actual APR will normally depend on two things, the loan amount and the level of risk. Broadly speaking, higher loans mean lower APRs but higher risks mean higher APRs.

When you enter your details, Freedom Finance will give you actual APRs for all the loans you are eligible for. This way you will know the actual APR of the loans on offer before you apply to your chosen lender.

Does it pay to shop around for the best loan rate?

To shop around you may have to complete a different application form for every lender. Even worse, each lender will then conduct its own credit search against your name. Applying to multiple lenders in this way can be damaging to your credit history.

However, shopping around with Freedom Finance is different. You only have to enter your details once.

Another downside of shopping around: you may never get the low rate loans you see advertised. If you have already been turned down for one low rate loan, it is highly unlikely that you will qualify for any other loan at that rate, because lenders use very similar acceptance criteria. You might see tempting rates advertised, but there is no guarantee that you will get these – and getting turned down again could damage your credit rating.

But with Freedom Finance, you cut out the time-wasting and the disappointment. The quotes you see after entering your details are for loans you can actually get.

When might it be appropriate to consider a second charge mortgage?

Unsecured lenders can only lend up to £25,000 typically over terms of between 1 – 7 years and their eligibility criteria can be stricter as they do not have the property as security.  So if you are looking to borrow more than £25,000 or a loan over a longer term to keep the repayments low you could consider a second charge mortgage 

Whilst a second charge mortgage can be taken over a longer period than unsecured personal loans the downside to this is that the longer the term of the loan, the higher the total amount repayable will be.

If you are looking to free up some equity from your property but you are tied into a mortgage which has early redemption penalties, second charge mortgages offer a way to access your equity without having to pay these penalties.

If you have a prime mortgage (one with a low APR rate) but have recently had credit problems, second charge mortgages could allow you to borrow money whilst still keeping the benefits of your low rate mortgage.

You should think carefully before securing debts against your home. Failure to repay your mortgage may result in charges for late payments, missed payments and defaults. Your home may be repossessed if you do not keep up repayments on any mortgage secured on it. 

Before taking out any mortgage you should consider whether you are aware of any circumstances now and in the future which mean that your regular income will reduce.  It’s important that you can afford the repayments now and continue to do so throughout the term of the loan.

If your question or issue is not answered here, you can still contact us or check the Money Advice Service site.

Can't find what you're looking for?

Call our helpdesk now on 0800 431 0142 and we'll point you in the right direction :)

Ask us a question...