Category: Advice

Advice

How to Find the Cheapest Loan

Looking for a loan does not tend to be much fun but it is a good idea to make sure that you do spend some time doing it. This is because they can vary a lot in many different ways and you want to make sure that you get the loan that is the best for you.

You may think that you will have to approach lots of lenders and get quotes to see which loan will be the cheapest. However, there are now much easier ways to do this. It is worth noting though that if you are comparing the prices, that the advertised price may not be the one that you actually get. Often the interest rates are the best possible ones and a lender may not give you those rates if they feel that you are a risk; perhaps because you credit record is not good enough, for example. However, all lenders will look at your credit record and it is likely that they would all assess risk similarly and could all potentially raise their rate from the advertised one.

If you do not have a lot of time to compare then it could be wise to use a financial advisor. If you find an independent one then you will have to pay them, but it can be worth it. They know about all of the loans that are available and will therefore be able to let you know which one will suit your needs the best at the lowest price. Not everyone wants to pay someone like this, perhaps because they think that it will be too expensive or because they would rather do the research themselves.

It is worth taking a look at some of the comparison websites. They have these available for loans and they will be able to help you see which have the best interest rates. These can save you having to look at lots of lenders, but it is worth noting that there are some lenders which are not on these comparison sites and the sites tend to have a limited amount of lenders on them. This means that you may still need to do some research yourself, looking to see what else is available.

It is really important to look beyond the interest rate of the loan though. There are other costs that you need to consider as well. Most loans will have a fee which will charged for setting it up. There will also be fees for other things, including late repayment fees. If there is any chance that you might miss a repayment, then it is worth being aware of how much this will be. Even if you are confident that you will make the repayments it is good to just take a note of this information, just in case.

Of course, the rates may change during the loan term and this is when calculating which is cheapest is difficult. If the base rate changes, it is likely that all loans could change as well. It is also possible that rates may change in between base rate changes too. It is impossible to predict when this might happen though. You could look back at previous rate changes and see how frequent they are with that particular lender, but past behaviour does not always predict future behaviour. It may be worth finding out what other customers think and if they feel that the rates are competitive and have remained so. You may feel that this is not something that you will want to bother to do because it is so unpredictable. One way to protect against this is to look at a fixed rate or a tracker rate but these can have some disadvantages and may not always be an option on all types of loan.

So there are several approaches that you can take to finding out the best loan rates. It may be that you are happy to do the research yourself or that you would rather pay someone to do it for you. It is worth looking carefully and considering all of your options. This is because loans can be really expensive and picking the cheapest one can make a huge difference to how much your repayments will be as well as how much the loan will cost overall.