Home / Money Articles / Loans: Do your research first

Loans: Do your research first

Loans: Do your research first

Written by:

Cash injection needed?

It’s fair to suggest that in these perilous economic times- most people could benefit from a sudden injection of cash- to help consolidate debt, cope with escalating overheads, attend to essential home repairs, and all manner of other reasons.

Are you sure you’re ready for a financial burden?

Obviously the major banks, lending houses and financial institutions are aware of this, and loans are presently cheaper now that at any point since November 2006. This makes them all the more appealing, and also enticing for the millions of people in the UK besieged with financial woes and other concerns. However before signing up to a loan, it is imperative to consider its short and long term implications- as whilst it may be able to temporarily foster some badly needed breathing-space- it should always be considered as an additional source of debt, that will need to be paid back at some point. If you decide to take out a secured loan, which if often the cheapest option- you should always remember that it will be secured against your home, leading to possible repossession if you are unable to maintain the payments.

Shop around for the best loan deals

Before deciding on the loan that’s best for you, it’s always advisable to shop around for the best offer. Banks provide a wide range of APRs, or annual percentage rates, and if you want to avoid hefty loan repayments, it’s always best to take out a loan with the lowest. Comparison websites are a fast and accessible means of getting this information, and are regularly updated to keep you informed of APR developments. It’s also very important to undertake preliminary research, as if you apply for multiple loans, you will leave an, “application footprint” that could potentially discourage some lenders from offering you loans.

Loans: Do your research firstCheck your credit rating first

As with all financial products, eligibility for loans are often determined by many terms and conditions that you will need to satisfy as a customer. These are often hidden in the small print, but its worth-while checking them out- as applying for a loan can be a time consuming process, and it is very frustrating if you find you don’t fulfill the criteria at the last moment. From this point of view, it’s also worth-while finding out your credit rating prior to applying, as most banks are very strict about this- and will only offer loans to customers with an unblemished and robust credit history.

Don’t forget: You have to pay it back

Whilst getting a loan will result in a fast influx of cash, it is important to consider the nature of the repayment charges and whether they are manageable under your present financial circumstances. If you feel that your circumstances are likely to change and that you will be able to pay off your loan early, it’s advisable to investigate the financial ramifications of this, as many banks attach early repayment charges to their loan products.

Would a credit card work better for you?

Although loans are heavily advertised, they are not the only means of securing finance, and on occasion- considering the advantages of getting a credit card can be a beneficial alternative. Today numerous banks and credit card companies are offering hugely appealing introductory and balance transfer rates, that can really make a positive impact on your future financial planning. As always, they’re lots of different deals available- so it really pays to shop around and do some thorough research.

Financial commitment

Whilst you don’t want to overwhelm yourself with future financial commitments, it is worth remembering that the more you borrow- the lower your interest rate is likely to be, so subsequently it may actually be better value to borrow more, but only borrow more if you actually need the full amount. In some cases you actually borrow more and pay less back in repayments. So- once again, it is worth-while undertaking thorough research before you decide which loan is best for you. And, ultimately make sure you can afford the repayments.



About Miles Matthews

About Miles Matthews

View all posts by