4 Things to Consider Before Getting a Loan

4 Things to Consider Before Getting a Loan

There are many times in life when you need to borrow money. Whether you’re a child asking a parent for pocket money, an adult getting a mortgage for a first home or you just fancy treating yourself to a new car. There are plenty of reasons you may need a personal loan, but you shouldn’t settle for any loan. Like many other things, loans come with terms and conditions, so you need to make sure you’re doing the right thing before signing on the dotted line. Here are some tips for finding a personal loan.

Don’t Agree to the First One You See

If you’re approved for one loan, the chances are that you’ll be approved for others. You need to shop around when it comes to loans because different lenders will have different interest rates. You don’t want to be paying 30% interest when you could be paying 10%. It’s also important to read the fine print. Will you be charged if you miss a payment? Are you entitled to any payment breaks should you lose your job? Find a loan that suits your needs and you’re less likely to have to worry about it in the future.

Check with Your Bank

Banks often offer their best rates to their existing current account holders. It’s worth checking with your bank to see if you’re entitled to better rates than advertised on their website or adverts. If not, other banks may offer you a better deal if you’re willing to switch your current account to them. Some banks also offer a cash incentive for switching online. Do a few searches and see what offers you can find. Yes, you may have to change your bank details which can be a bit of a hassle, but it’s worth it if you save a significant amount of money.

Early Repayment Charges

You never know what’s around the corner. Although you may not think it possible to repay your loan early, you may come into inheritance money or win the lottery. You may even land yourself a better job with a significant pay rise. The point is, there are often times when people want to repay their loans early and find themselves faced with outrageous charges. Before taking out any loans, keep their early repayment charges in mind.

Your Credit Rating

If you have a bad history with credit, it may be more difficult for you to find a loan. Although you may be approved for a loan, you’ll probably find that the APR is high. If you have some time before applying for a loan, use it to boost your credit rating and search for loans for bad credit. Make sure you’ve done all the little things like being placed on the electoral roll and using a credit card to show you can make payments when needed. You’re also able to make comments on your credit report. So, if there’s something on your report that seems unfair, adding a comment to explain it could go down well with lenders.

Any other tips you can share with us?

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