Whether we want to buy a car, do some home improvements or tide ourselves over a difficult month, most of need to use loans from time to time. Even though commentators keep telling us that credit is tight, there is still a huge range of choice when it comes to borrowing money.
With so many different products and companies in the market it’s important that you find the right one for your needs.
Secured or Unsecured?
Loans are generally either secured or unsecured. Secured loans are only available to home owners and mean that your house is used to provide security for the value of the loan. Unsecured loans are available to anyone – provided you have a good credit rating – but are usually costlier.
Within these loan types there are a variety of different products. Home improvement loans, car loans, consolidation loans, payday loans and more. If you need help in navigating through all of the products available, then you might want to go to a broker like SGE Loans.
Comparing Products
With so many types of loan available it can be tough to find the right one to meet your needs. The Internet can help here, allowing you to compare products from different companies. But how do you measure one against the other?
First of all you need to look at the eligibility requirements. It’s pointless applying for a loan that you don’t qualify for – one that’s only open to home owners if you’re renting your house for example.
People often focus on the interest rate when looking at loans. Lenders are obliged to quote an annual percentage rate (APR) for their products. However, this can be a little misleading especially for loans that are intended to be paid back over a short period. What’s important is that you look at the amount you’ll have to pay back each week or each month, and the period over which you’ll need to make the repayments. You need to ensure that this is affordable, so make sure the instalments are manageable. Again a loan broker such as SGE Loans will be able to help you compare products and find the right one for your needs.
Other things to look out for are whether there are penalties for repaying the loan early or for making overpayments.
Poor Credit History
If you don’t have good credit history, you may find it hard to get an unsecured loan. Home owners will have better access to secured loans, though usually at higher interest rates than those with a better credit score. There are ways around the problem though. Products like guarantor loans allow someone with a good credit history to back your application.
There’s a lot of choice in the loan market so it pays to spend some time comparing different products. The Internet means that the application and decision process is usually fast and straightforward, so once you’ve found the right loan for you the money can be in your bank quickly, often on the same day.