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Cheap Loans

Is the Cheapest Loan the Best Loan?

When you are looking to borrow money you will obviously want to pay as little as you can for the loan. However, when comparing interest rates, you may find that you miss out on other important factors that could influence your decision. It is worth thinking beyond the interest rates sometimes.

Firstly, it is worth noting that most comparison websites will only compare the best possible interest rates. Lenders do vary their rates depending on how much risk they feel their borrowers are. This means that there is no guarantee that you will get the advertised rate and so you need to be wary and make sure that when you decide who you want to use, you will check what interest rate they offer you before signing up and also check for other costs. They may be administration fees that you need to pay to set up the loan, depending on what type it is. This may be a significant cost and so it is something that you need to check out as well.

As well as the cost though, there are other things that could be factors for you when you are choosing a loan. Loans without a credit check being one example. You need to consider whether there is anything else that is important to you as well. This could include many factors and it will help you to decide whether you are getting good value for money.

You need to consider the type of loan and whether it is right for you. Think about whether it is flexible enough for you, whether it has good customer services, what its policies are if you cannot cover repayments, whether you can overpay and things like this. It is important to think about what you want out of the loan and whether it is giving you what you want.

As well as this you need to consider the type of loan. The cheaper loan may not offer exactly what you want with regards to the repayment term, whether it is fixed or variable interest, the size of repayments or even the amount that they may allow you to borrow.

It is worth thinking about how much you can afford to repay and seeing whether the repayments on the loan will be affordable for you. You need to consider whether you normally have that much money extra to be able to make the repayments and if not, whether you could find a way to get the money. Perhaps by increasing your earning or spending less you might be able to manage, but you need to plan it out. If the repayments are too high for you to manage then you may have to find an alternative loan that allows you to repay over a longer period so that the repayments will be smaller. This will be more expensive, as the longer you take to repay the dearer the loan, but if it means you can manage financially, then it could be worth it.

You may want to make overpayments on the loan at times, so that you can pay it off early and save money. Alternatively you may want to take payment holidays if you are short of money. Some lenders will be more flexible than others and if you think that you will need that flexibility then you need to find a lender that will offer that. It may be that they will be more expensive as a result of that but it will be worth it if it means that you get the flexibility that you need.

Look also at whether the interest rate is fixed or variable. If it is fixed you will get the security of knowing exactly how much you will be repaying each month, regardless of whether the base rate changes. It is hard to predict whether rates will change and if they will go up or down, but if you think that you will struggle to manage repayments, then the peace of mind knowing that they will not go up can be worth a lot.

So even though it is wise to look for the cheapest loan, it can also be a good idea to think about other factors that could influence whether a loan is right for you. It should not be a quick decision and you need to spend time thinking about what you need. It can be wise to talk to a financial advisor if you really need help.


How to Pick the Best Lender

There are many places out there which will be willing to lend you money. It can something be rather confusing to know which to use and you may even just be tempted to borrow form one without thinking about your options. It is unwise to do this. Every time you borrow money, you should be considering whether this is the best way to borrow money and the best place to borrow it from.

Choosing a lender can be a really important decision. You need to consider what you think will make a good lender for you and then see who fits the bill. You may be tempted to just consider cost but there are other factors that could be important as well.

It is worth comparing the interest rates though. If these are variable rates, do bear in mind that they could change. They will not necessarily only change when the Bank of England base rates change either. The lender could change it at any time. It is very difficult to predict when this might be, but you could look back at how they have changed the rates previously and compare that to other lenders to try to predict what they might do in the future. This is tricky though.

As well as interest rates, there will be fixed costs to consider as well. You may have to pay a charge for opening the account, for making overpayments or paying the loan off early, for not paying when required or being late with payments, to name just a few. It is wise to find out what these costs are and think about whether they are costs that you are likely to have to pay.

It is also worth seeing how flexible the loan is. Some will allow you to make overpayments when required and also to have payment holidays if you need them. If you think that you income or available cash will be erratic this could be a really useful option for you.
Customer services can be really important as well. If you have questions for your lender or need help, then you will want to make sure that you can get hold of them and that you can speak to knowledgeable people that are willing to help you. This can be tested by calling them before you take out a loan and asking them questions to find out how good they are.

It can be wise to look at reviews of the lender and the product you are thinking of taking out online. It is worth remembering that people are more likely to complain about a bad service than praise a good one. However, you may find that some have a lot more complaints than others and it could help you to find out whom to avoid.

Some people like to go with a lender that they have heard of. These days lending is a very competitive area and so you will find that there are all sorts of places willing to lend money, not just the high street names that you are used to. You may feel that you would like to go with a name that you know well as you feel that you can trust them more. It is a very personal thing, some people would be happy going with one they do not know if the costs were low and they had read some good reviews.
Everyone is different but it is worth considering why you like certain companies over others. It may just be that you have heard of them and it could be that you have not specifically heard something good about them and therefore you do not really have a reason for wanting to use them. It can be worth chatting to friends and family to see who they have dealt with and who they may recommend or advise you to avoid.

Some people would rather go with a lender that has a local branch. Although many people are happy to deal online or over the telephone there are some who would still rather talk to people face to face. This means that they will need to go into a branch to do so. There are many lenders which do not have branches and so this will limit your choice.

Borrowing Money

Tips on Deciding How Much Money to Borrow

If you have decided that you need a loan, then it can be tempting to borrow more money than you need. It isn’t even that easy to always work out exactly how much you should borrow. Even when you are borrowing for a fixed price item, such as a home or car, you may not be sure how much to borrow. Below are some tips to help you to make up your mind.

Use your savings

Before you borrow any money you should take a look at your savings and see whether you have enough to cover the costs of the item you were thinking of borrowing money to buy. There are people who do not like the idea of using their savings but it is far cheaper to do this than to borrow money to pay for things. If you borrow then you will have to pay interest on the loan and you may need to pay other fees as well. You will also get into trouble if you cannot make the repayments. It is far better to use your savings and save the money and prevent yourself from going into debt. You can always start saving again with the money that you would have had to find to make the loan repayments.

Only borrow what you have to

It can often be tempting to borrow a little bit of extra money to what you actually need just in case or because you would like to buy a few extra things. As borrowing is so expensive, it is much better to avoid doing this. Just borrow what you need not any extra. You will not only save money but it will be easier to repay as repayments will be smaller and you will not need to repay it over such a long time period.

Check you can afford the repayments

It is really important to make sure that you are able to cover the cost of the repayments before you borrow money. Find out how much you will be having to repay and then work out how you will afford it. Consider whether you can cut down your spending on some things to free up some money or whether you will be able to manage without doing so. You might need to see if you can earn more money, perhaps by working more hours or getting a second job. It is also worth considering how you may manage the repayments if you did get short of income or your expenses went up. There is also the chance that interest rates may go up and that could have an effect on the cost of the loan and how much you will gave to repay each month.

Look out for hidden costs

It is wise to make sure that you do not get trapped into paying hidden costs unnecessarily. This will all depend on the loan but you could be charged for all sorts of things. You would probably guess that you will be charged if you miss a repayment, but you could also be charged if you overpay as well. You may be charged for asking for extra statements and if you have a credit card you could be charged for drawing out cash or using it abroad. It is vital to be aware of all of the situations where you may be charged so that you can avoid them where possible. If you think that there are hidden costs this will increase the total cost of the loan and may mean that you will not be able to afford to borrow as much.

Find the best deal

It is worth taking some time to find the best possible deal for you. If you can keep the costs down then it could mean that you will be able to afford to borrow more money. Do be careful though and make sure that you are not tempted to borrow more than you need because it seems a good deal. You will have to repay more if you borrow more so it is sensible to keep borrowing to a minimum.

So it is wise to make sure that you do not borrow too much money. Borrow just as much as you need and if you have savings use them instead. Make sure that you are aware of all costs, are capable of making the repayments and find the cheapest deal so you do not end up paying out more than necessary.