When you want to take out a loan, it needs to be a measured, carefully considered choice. Borrowing thousands at a time can take a while to pay back, and you can’t be sure how your financial situation is going to change in the future.
Default on any of the payments and you could be stuck paying off even more money, for even longer. The debt can get dire, and many people find it hard to see a way out.
But how can you make sure you’re getting a good deal on a loan when you need one? If this is the worry you've got right now, the tips below could be what you’re looking for.
Is it a serious, essential purchase you genuinely cannot go without for long? Or is it more of a non-essential, want-based thing, that you could put time into saving up for? Be as ruthless as you can with yourself here.
You don’t want to take out a loan for something you really don't need a loan for, as this just piles more debt onto your plate. It could even land you in the risk zone for not being able to pay off all the credit you owe.
Always Get a Range of Quotes
Shopping around is key with any purchase you need to think about, and you should always research your choice of loan providers too.
When you have a range of quotes, benefits, and promises, you have a much better picture of what’s available to you. This will save you money in more ways than you might think!
Say you want to take out a loan for a new car. Getting a range of quotes will let you find the average cost you’re looking at, and you can easily identify outliers as well. Anyone asking for well above the average might just be overselling you, and if you took their loan, you may require a pcp claims expert in the future.
Double Check the APR AND Other Potential Fees
No matter the type of loan you’re taking out, you’re going to have to pay it back. Always double check what the APR on the loan will be, to find out just how much more you’re going to be paying on top of the loan amount itself.
You can use a simple calculator for this; all you need is your loan amount, repayment period, and interest rate.
And even if you want to avoid severe APR terms by paying it back in one go, you won’t necessarily get the best price for the repayment.
Loan companies prefer it when customers take their time (although not too long), and you may have ‘early closure’ fees to contend with as well. This will usually be a set amount of interest based on how long a term period you have left.
Are you in need of a loan? Always be sure you’re making the right choice!
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