Personal Loans

How do I Pick the Right Personal Loan?

There are lots of personal loans available for us to choose form, so it can feel rather daunting and be rather confusing knowing which one to choose. There are likely to be quite a few differences between the different types of loans and so it is good idea to know what those differences are and then you will be able to compare them and figure out which will be the best one for you.

Interest Rate

Many people will compare the interest rates of loans to try to figure out which will be the best for them. However, this might not be the vest way to do it. This is because some loans will have fixed fees as well as interest so the interest rate will not represent the full cost. Also, there are two ways of reporting interest rates. Ones is the APR which is the Annual Percentage Rate and the other is the AER which is the Annual Equivalent Rate which will include any fees and charges in it. Therefore, it may be better to find an alternative way to compare the costs of the loan than this.

Total Cost

It can be a good idea to think about the total cost of the loan then rather than comparing just the interest rate. You may find that the lender will have a calculator on their website whether you will be able to work this out. However, if you are not sure how to use it, you can always ask the lender directly and they should be able to tell you themselves.

Repayments

It is always important to make sure that you look into how much the repayments are. You need to think about whether you will be able to afford them, Find out form the lender what you will be repaying and then look at your personal financial situation to see whether that is something that you will be able to afford. IT is easy to think that you will be able to work it out in your head, but it is much better to write down all the figures. Note down how much you will be getting in each month and how much you normally pay out and then you will be able to calculate whether you will be able to afford the repayment as well as everything else that you need to pay.

Lender

It can also be good to do some research into the lender and what they are like. Some people want to use one that they have heard of but it is a good idea to think about whether this is a good idea as the reason you may have heard of them might be because there was a negative newspaper article about them or because they pay for advertising and neither reason is a good one to use them. You need to think about whether the lender is one that you will trust, perhaps by looking at reviews or talking to other people and see who they would recommend. Make sure that you think about what is important to you in a lender and then match this up with what the reviews and others are saying so that you know whether they match up or not. It is wise to take a look at the lenders websites so that you can get an idea of what they are like from there as well. Some people feel that the customer service is the most important thing to look at. This can be wise as if you need to contact them about anything, then you will hope that they will be helpful and polite. Therefore, it can be a good idea to contact them yourself and see what sort of response you get and that will allow you to be the judge.