Taking out a personal loan is a big deal for many. There is always the burden of repaying the loan in time. Even if you take the loan to meet a few smaller expenses,the amount of interest you need to repay will keep you worried. That is why it is better to research the lenders before applying for your loan. The loan provider should guide you throughout the process and explain the terms and conditions clearly. Money Trumpet who help find a wide range loans including for those with poor credit have kindly put together this short guide,you can visit their site for more information
Finding the best loan provider
Many people feel bewildered when it comes to managing money. With the economic turmoil,you may think twice before applying for a loan. But the right loan provider can support you and encourage you to take the loan to meet your financial crisis. Here are a few things you need to consider before applying for your loan:
1. Credibility and experience
Have you come across the name of the lender before? Is it a known loan provider in the UK? Always Google or check the reviews if you don’t have the answers to these questions. Many loan providers try to lure people into taking money from them at unbelievable interest rates. But they have hidden costs,such as processing fees and monthly fees,that ultimately increase your repayment amount.
Apart from credibility,you should also focus on the experience of the loan provider. Most loan providers have websites so that borrowers can check their details before getting in touch. Go to the ‘About’ section of the website. It should have information about the year of establishment and the experience of the lender. It is better not to take a loan from a lender that doesn’t disclose its year of inception.
2. Interest rates
Make it a thumb rule to compare the interest rates of several lenders before taking the loan. The lesser the interest,the lower the amount you have to repay. Again,background research is crucial while comparing the interest rates. Many loan providers may try to attract customers by promoting that they provide loans at low-interest rates. But they may have complicated terms and conditions regarding repayment that may not suit your financial status.
All financial institutions in the UK have to maintain an average interest rate. Suppose there are five loan providers. Three of them charge 7.5% interest on personal loans,one 7.3%,and the other,7.2%. While 7.4% is the average interest rate,no financial institution can charge 5% or even 6% to attract more borrowers.
Apart from the average interest rate,there are a couple of more things that you need to keep in mind:
â¢ Your credit history
â¢ Type of loan you want
Personal loans usually have lower interest rates than home loans or car loans. But it is always wise to compare the rates to get the best deal.
3. Payment flexibility
Will the lender allow a flexible repayment schedule? Will the lender charge a higher rate of interest if you can’t repay on time? For example,you have to repay your loan in the next eight months. However,you are struggling to make ends meet by the seventh month. Will the lender give you an extension of one month to repay the loan without charging any extra money? It is better to discuss the repayment terms in detail because many lenders harass borrowers if they can’t repay on time.
Sometimes you may make enough money to foreclose the loan. Will the loan provider allow you to do that without charging anything extra? Foreclosing a loan is beneficial for borrowers,but some loan providers may not allow you to repay before time.
4. Response times
Support from the lender is crucial whenever you take a loan. If the loan provider doesn’t respond to your queries appropriately,feel free to contact other lenders. Most people consider personal loans at the time of an urgent financial crisis. Every hour,every day is crucial. Even a slight delay in such a situation can be fatal. The quicker the lender responders,the quicker you get the loan.
Apart from these four factors,you should also consider if the loan provider offers detailed documentation of your loan. It should have the terms and conditions in detail,the repayment schedule,and details of the loan provider.