There will be times when cash is a bit low and it is a long way till pay day. There are many options out there to secure finances and one of the most commonly used in the personal loan. You can apply for a loan from a bank and can be straight forward in acquiring. You can come to an agreement over the amount you borrow and decide on fixed monthly instalments. Without the amount of deals out there offering exceptional rates, it can be a little difficult picking the one that is right for you.
Here are some tips that might help you look for an excellent deal:
Work out the cost of the loan
Interest rates are not the only cost of a loan, you need to consider the arrangement fees and repayment penalties (In the event of a late repayment). Keep in mind that some firms will charge for paying the loan of early. This can be avoided by arranging payment dates and monthly payments. If you think that you will have the money to pay the loan off in a short space of time, it might be advisable to opt for a short term loan.
It is best to calculate the overall cost of accepting a loan to see if it is going to cost you more in the long run.
The interest rate will depend on a few factors, your credit score being one of them. Banks will want to know your credit history when you apply for a loan and if you have a bad credit score, they may either decide to raise the interest, or reject the application all together. Ensuring that you have an excellent credit history will serve you in future.
How long did you want to borrow for?
As mentioned previously, some banks will charge for early, full repayment. Consider how long you wish to borrow for as this can have an effect on the repayments. For instance, if you are borrowing £7,500 over three years at 5.1%, your monthly repayments will cost £224.73 and the total cost would be £590.28. Discuss with the lender about suggested payback duration.
Read the fine print
With any sort of financial agreement, ensure that you read the fine print. Most lenders hide clauses and charges in their paperwork. Reading it will make sure you are not caught off guard. Especially when it comes to PPI as it can often be sold to you without permission and charges are hidden within the fine print.
Never accept the first deal that comes your way, it is vital that you shop around to see what rates of interest are beneficial for you. Online websites can find the best loan for you depending on your circumstances and can get you in touch with other interest based finance companies. Once you have done your research, you can then compare which loan is best for you through assessing the APR, length of loan and the total amount repayable.
Following this brief can guide can help put you on the right path to deciding on an excellent deal. As mentioned, it is important to do research and seek guidance on the best loan.
By Harry Price
Harry Price is a talented writer that lives by the sea. He spends his spare time cooking and looking after his 3 dogs.