There are a number of ways to go about getting a loan. What you shouldn’t do, though, is limit your search.
To make sure you get the best deal possible, follow our steps below:
Visit a branch
If old traditions die hard with you, you could look for a loan the old-fashioned way by popping into a physical bank. But although you’ll have the benefit of speaking to someone face-to-face with this option, there are a couple of important drawbacks.
Firstly, you could miss out on more competitive rates. By narrowing your options to a handful of bank branches, you’ll miss out on the luxury of searching through lots of deals at once. Furthermore, not all lenders have physical branches anymore, so you could lose out on what they have to offer.
Check with your current provider
For simplicity’s sake, some people prefer to stick with their existing credit, loan or mortgage provider when looking for a loan. Some banks offer better rates to existing customers for their loyalty, so this could be a good choice to grab a competitive deal.
But while we do recommend checking what your current bank has to offer, we also advise looking elsewhere too. This is because although your bank may be offering you a better deal than it does to new customers, that deal isn’t necessarily better than those of other loan providers.
A good way to get an overview of what’s out there is by using comparison tools. Websites like comparethemarket.com, Gocompare.com, MoneySuperMarket, Confused.com and uSwitch are market leaders in this area.
You’ll just need to answer a few questions, like what you’ll use the money for, how much you want to borrow, how long you want to borrow the money for, whether or not you’re a homeowner, your employment status, income and address, and they’ll do the rest for you. You’ll then be presented with loan deals from lots of providers to see who offers the best rates.
What loan should you get?
One thing that could narrow your search is how much you want to borrow. For example, if you want to borrow a relatively small sum of money, you can do so using a personal loan – or you could even consider a credit card instead.
If you want to borrow more but keep the repayments manageable, you could think about a secured loan. You have to be a homeowner to qualify, as the money is secured against your property.
Alternatives to mainstream loans
If you’ve scoured the web and wandered the streets and still haven’t found a loan deal that’s right for you, there is another option: private loans.
Speak to your family or friends to see if it’s possible to borrow the money you’re after from them. You’re less likely to pay any additional costs – like interest – on the money your borrow. This makes the cost of lending much lower. There are some important pros, cons and questions to consider with this type of borrowing, and you can read about these here.
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