Loan Companies

The ever-growing list of people prepared to lend you money.

Loan companies fall into three main categories. There are traditional lenders- banks and building societies. Then there are direct lenders; a whole range of groups from supermarkets to insurance brokers; and many of them offer innovative products that push the lending boundary (consider flexible banking products, for example). Finally, if you're in financial difficulties, consider specialist bad credit lenders; debt consolidation and debt negotiation companies, all of whom will reduce your monthly payments but not necessarily reduce your overall debt.

It's a funny old world. There was a time when to get a loan, you went to a bank. Now, you can get a loan in a supermarket, and a credit card from your football club. Seriously though, loan companies split out pretty much into three ways:

Traditional banks: they no longer offer the best rates, except in fairly specific circumstances, but they are quite responsible (or conservative) lenders. Often they will refuse you when other companies would accept you; but if you have a prized relationship with your bank manager (and everyone should try to have that) then the reverse might also be true.

Direct lenders: this is the new bunch of loan companies- everyone from Direct Line to Egg to Sainsbury's, who have a small range of one-size-fits-all loan products. They keep costs and rates down by keeping like simple; so if you fit into the broad majority, they can help. If you need a more specific service, they probably can't. Direct lenders are the "Model T Ford" of loan companies. The exception perhaps is Egg, whose flexible finance package is a law unto itself- expect more Egg-alikes in years to come.

And finally there are the specialist lenders who mop up so-called uncreditworthy cases. These loan companies, like Purplequote (or in the motoring world Yes Car Credit) won't offer you the best deal, but they will usually say yes when cheaper sources of money have said no. You will pay dearly for the pleasure, though.