Personal Loan Tips

Overview

Personal loans are necessary in todays tough economic climate. Below are some essential personal loan tips.

Shop around – As with any financial product, when it comes to taking out a personal loan it pays to shop around and compare.Your bank may say it offers preferential rates to its current account customers but you might still find there are cheaper loans available elsewhere.

Check the small print – Before you apply for a loan, check the small print to see if you’re eligible. Some best buys come with some onerous conditions.

Think about early repayment charges – It might seem unlikely at the time when you take out a personal loan – but don’t forget that it’s possible you will be able to pay off your debt early. Many loan providers will apply a charge if you wish to do so, so it’s a good idea to check how much this might cost before you apply for a particular deal.

Check your credit rating – If you plan to apply for a market leading personal loan, it’s crucial that you check your credit rating first. If your credit rating is not in good shape, you may be offered a more expensive deal than the low rate loan you originally applied for.

Consider a credit card – Before you apply for a personal loan, consider other forms of credit. You might find a credit card is cheaper and a card with a 0 per cent introductory offer on purchases will enable you to spread the cost of big purchase interest-free.

Don’t apply for too many loans – When you apply for a loan online, most applicants will leave a footprint on your credit record which lenders check before approving a loan. Having lots of applications on your record makes you look desperate or in financial difficulties. As a result lenders will see you as more of a credit risk.