If you need to take out a loan, it can be difficult to know where to start. You might have had a loan before, but perhaps things have changed, or you want a different type this time. You know that you need to compare the different offers you could find. But you’re not sure what you should be comparing. There’s no need to let loans confuse you when you can learn about just what it is you’re looking at. Whether you use a comparison site or not, you can get to grip with what’s available.
Decide How Much to Borrow
Before you start looking at different lenders, you need to determine how much money you need. You probably already have a good idea of how large of a loan you’re looking for. The important thing to remember is that you don’t need to borrow any more than necessary. Once you have an idea of how much money you want, you can decide who to borrow it from. You could choose between banks, online lenders, high street companies or even people you know.
Understand the Numbers
If you want to compare money lenders accurately, you need to know what’s you’re looking at. You might hear people talking about APR, interest rates and other terms, but do you know what they mean? You probably already understand what an interest rate is. It’s money you pay on top of what you borrow, as payment for the loan. Different lenders will have their own interest rates. So it’s important to compare them before taking out a loan. APR stands for annual percentage rate. This is the percentage of interest paid in a year, including any fees.
Use Comparison Websites
Once you understand the basic terms, you can begin to compare lenders. One way to do this is using comparison websites. These sites will put different loan providers in a table so that you can compare them for the money you want to borrow. They can be a useful tool, although not everyone thinks so. For example, Cashfloat suggests that comparison sites aren’t impartial. This is because they allow lenders to buy advertising. If you do use comparison sites, be wary of whether the lenders could have influence over their position.
Look at Lender Sites
Another way to compare loan companies is to go straight to the source. You can read the information that a lender’s website provides and make your own comparisons. You can judge a lot from a loan provider’s site, such as how transparent they are about their costs. Observe how much information they’re willing to reveal and how open they are.
Read Reviews and Advice
Don’t just take lenders at their word, however. It’s also important to do some independent research from impartial sources. Look for websites that offer consumer advice and find reviews of loan companies. Talk to your family and friends too, to see if they have any relevant experiences.
It’s important to make comparisons between different loan providers. If you don’t, you could get a raw deal. Just ensure that you know what you’re looking for.