If you're in need of a loan, you're probably looking around to see what options are available. You might even be overwhelmed at the selection. There are so many types of loans out there, and they all have positives and negatives to take into account. They will all suit a certain set of needs, but are they all suited to your particular needs? If you want to find the best deal around, you're going to have to compare the offers. Here is how you can do that.
What Do You Need It For?
Before anything else, you've got to think about what you need the loan for. That is going to dictate what kind of loan you need to pursue. That includes the amount you will borrow, the kind of repayment, the length of the loan, etc. That means that you can differentiate between the loans and make an initial selection without going into details. Let's say you need money quickly - that means you might go for something like a quick loan, same day loan, etc. but not necessarily a logbook loan, for example.
Are You Eligible?
The first thing to look out for eligibility. You see, you might not qualify for every kind of loan. So, check the eligibility requirements for the loans you are interested in and see if you meet them. Most loans will require you to be at least 18 years old, have employment, and a UK bank account. They will most likely also request a credit check. If that's something you're concerned about, compare loans and see which ones are available with no credit check. You might want to use an eligibility checker like the one from Money Saving Expert to see whether or not you would qualify.
How Much Money Can You Get?
Of course, depending on your needs, the amount you can get is one of the most important aspects of a loan. You will be able to get more or less, depending on a few factors. First of all, it'll depend on whether it's a secured loan or an unsecured one. A secured loan is one you have collateral for, and grants you more money.
Then, it also depends on your credit score, especially for unsecured loans. The better your score is, the more money you will be able to get. Of course, different companies will grant you different amounts, so look out for how much they're willing to lend.
What Are The Repayment Terms Like?
Another thing you need to be aware of and keep in mind is how long you have to repay the loan, and what the terms are like. Do you repay in instalments? Do you repay it all in one go? Do you get to pick how many instalments you pay in or how high the amounts will be? Make sure to compare repayment styles in order to determine which loan is more convenient for you and more affordable.
What Is The Interest Rate Like?
Finally, you've got to take into account one of the most important aspects - interest rate. The interest rate is the one that will determine how much you will ultimately repay and how expensive this loan will end up being, in reality.
Obviously, the loan with the lower interest rate is more affordable, but you also need to look at things like additional charges, as well as long-term interest. If you take too long to pay, does the interest rate change? What happens if you decide to repay the loan early? Will that incur additional fees? What you're looking for is the loan that will end up costing you less, so compare loans and costs and see what the bottom line is. A loan calculator can help you determine how much you'll end up paying. Use this one from The Money Advice Service.
As you will be able to see after going through each of our points, loan comparison is a very important step in deciding which loan you should go for. You cannot get the best possible deal if you don't compare loans and look at both advantages and disadvantages.
You're looking for the cheapest one overall, but it should also give you a certain amount of flexibility, enable you to pay in affordable instalments, it shouldn't come with a million extra fees, and ideally, it would offer you the amount you are looking for. Of course, this all depends on your financial situation and whether you're going for an unsecured loan or a secured one.
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