6 Schoolboy Errors to Avoid with Teacher Loans

Life can be busy when you’re a teacher – or work in any education role. But that doesn’t mean you should cut corners when it comes to getting a loan. In this quick guide, we’ll run through some schoolboy errors that could cost you in the long run – and how to avoid them.

1.   Going with your first option

Whether you’re getting repairs done on a school or buying new textbooks, it always pays to shop around. Loans are no different – at the initial stage.

It can harm your credit score if you apply for loans with lots of lenders as they may need to perform credit checks, which stay on your file. However, you can shop around by comparing the APR on offer with different financial institutions. And remember, there’s more out there than just the big banks…

2.   Only trying banks

When you say loans, people immediately think of banks. But there are other options available. By going directly to your bank, you could miss out on a great deal elsewhere. Or you might be rejected simply because of a less-than-perfect credit rating.

Credit unions are one alternative, which are not-for-profit and committed to responsible lending. Many offer a personal service, which you simply don’t get with other lenders.

You might also be able to get a loan with online lenders, though you’ll need to do some additional checks – that brings us to…

3.   Using disreputable online lenders

Online lending has its advantages – it’s quicker and easier than ever to apply for a loan. That said, it’s also easier for dodgy lenders to fake credibility. Here are some simple things you can look for:

• Check the Financial Conduct Authority register to see whether a lender is regulated by this important independent body.
• Ensure they have a legitimate address and contact details that actually work.
• Check online reviews on sites like Google and Trustpilot to see if lenders are worth their salt.

4.   Not checking the small print

Lesson four in borrowing – there’s more to loans than the interest rate. For one, lenders can hit you with fees for origination, processing and underwriting. You may also be charged for late payment and early repayment, which can add to the overall cost of your loan. It’s important to read the fine print before agreeing to any loan, as it could cost you more further down the line.

5.   Falling for false claims

We touched on disreputable lenders before, but it’s worth highlighting some of the tricks they use to reel people in – especially teachers and education staff who have been rejected in the past.

Things like “guaranteed approval” and “no credit check” may be advertised on their site. In reality, they can’t guarantee approval, and they will usually perform a credit check, which could impact your score.

It’s best to steer clear of anyone making these claims.

6.   Choosing based on interest alone

It’s easy to focus solely on the interest rate when comparing loans – but that’s only part of the picture. You should also consider the loan term, which affects both your monthly repayments and the total amount you’ll repay over time.

A longer term spreads the repayments thinner, making it more affordable month to month. On the other hand, a short term is better if you want to minimise the overall cost as you’ll pay less interest.

It’s also worth looking for flexible features, like the ability to make early repayments without penalties. This can give you more control and save you money if your circumstances change.

Loans for teachers from 6.2% APR

Avoiding the errors above will help you find a suitable loan for teachers or education employees without any nasty surprises. At Metro Moneywise Credit Union, we’re dedicated to helping teachers save and lend responsibly – as well as anyone else working in education.

Members of our credit union can borrow £100 to £25,000 with interest rates from 6.2%. You’ll also have a safe place to save for life with dividends paid annually as we split any profits between our members. Most importantly, you’re automatically eligible for membership if you work in education, as this is part of our common bond.

Join online below to get started. Or, if you’d like to find out more, don’t hesitate to contact us on 01706 298966.