Four Ways To Make Sure You Get The Best Loan

by Adam on May 31, 2012

From personal loans to mortgages, everyone wants to find the best deal.

Saving for what you want is the best way but if you do need to borrow money there is no reason to pay excessively to borrow money.

A smart consumer takes the time to shop around and look for the best opportunity. Starting your search at moneysupermarket.com can help, along with these tips for finding the best loan.

 

Look Closely at the Interest Rate

Just because one lender offers a lower APR (annual percentage rate), it does not mean that this is the best deal. Banks tend to calculate interest differently and you may be surprised to learn that sometimes the lower APR is not the least expensive. Check out the details before proceeding.

These details include the credit limits available and the fees associated with the loan outside of the interest rates. Find out how much it will cost if you happen to be late one month and what it will cost you to pay off the loan early. These details are key points to consider, making sure you get the best loan.

 

Maintain a Good Credit Rating

It is no secret that consumers with a higher credit rating are going to get a better deal on a loan. They will pay less in interest and have the ability to pick and choose the right opportunity. Often, a lower score means not only higher interest rates, but also an out and out rejection. For some people, it may be worth holding off on the loan until they are able to improve their credit rating.

 

Shop Around

Everywhere you look, lenders are offering different opportunities to take out personal loans, car loans and mortgages. If you have a good credit score, you will probably be offered different loans to choose from. You already know to ask about the interest rate and how it is calculated. You also know that you need to check out the fees associated with borrowing money. Now, it is important to compare different lenders and different loans in order to choose the loan that best serves your purposes.

 

The Amount of the Loan

Think about the amount that you want to borrow before going through the application process. It’s likely that the smaller the loan amount, the more you are going to pay. This may be less of a risk for the lender, but it is also not going to make a lot of money. In some cases, it may be better to take out extra money and use it in a productive way, such as paying off high interest credit card balances.

In some cases, the amount is so small that it is not worth checking into a personal loan. Instead, look for other options such as using the money from a savings account or paying with a no interest credit card.

By paying off the balance before interest accumulates, you may have found an even better deal.

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