When it comes to financing, we're all looking to save as much money as possible and spend as little as possible, and that is no different when it comes to loans. Some loan options are more financially convenient than others, and rates will differ depending on the company, the type of loan, the amount of the loan, the repayment term, as well as your own financial situation and affordability. If you're looking to get the best loan rates in 2018, keep reading to find out some useful tips and tricks.
1. Shop around
First thing's first - if you want to get the best loan rates, you never take the first offer or the first loan option you find. Nowadays, there are hundreds of companies and loan varieties and options you can choose from, so there is no reason why you should limit yourself.
You can go on the high street or - even better - go online and search for "loan Location", like "loan Birmingham", for example. That will yield pages and pages of results for lenders who offer financing. If you are looking for a specific type of loan, you can restrict that search more by looking for "payday loans", "secured loans", etc. Once you've narrowed down some options, you can start comparing them to see who offers the better deal. 9 times out of 10, there will be better offers out there than the first one you found.
2. Do a company background check
Something else that people don't take into account in their search for the best loan rates, is that lending companies are not always as they seem. Before committing to anything, take the time to look into the company's background. How long have they been in business? Do any red flags pop up? Can you find evidence of any dishonest practices? What do the reviews say?
If there is any indication that the company may try to pull a fast one over you and make you pay more than they advertise, it's best to stay away and start looking for an alternative option. There are plenty of fish in the sea and it's not worth taking the risk.
3. Read the paperwork carefully
In the same vein as our previous point, make sure that you read all the paperwork completely and thoroughly, multiple times, before you move on to signing anything. A lot of companies turn out to be dishonest, but it's too late, and you're stuck with extra fees, rising interest rates, and other tacked-on charges.
That's why you need to review the paperwork with a critical eye and check for any hidden clauses, surprise fees and other charges that should not be there, that look funny, or that you did not previously agree on. It's not too late to stop the lending process if you haven't signed yet, so don't be afraid to make a fuss if you're being lied to.
4. Use an eligibility calculator
Did you know that your credit score takes a hit every time you apply for a loan that you get rejected for? It's true - because of the way these things work, every time there's an inquiry, you lose points, making it harder and harder for you to get the best loan rates, or be accepted for financing at all. You can circumvent this issue by either doing what is known as a "soft search" beforehand, or by making smart use of an eligibility calculator. That will allow you to make an idea of what you would be eligible for before you actually apply, so you can save yourself the unnecessary credit damage.
5. Don't borrow more than you can afford
Affordability is one of the major concerns when it comes to loans, if not the biggest one, at that. The best loan rates are the ones that you can afford, but how can you know that for sure? Well, just like eligibility calculators, there are also tools available that you can use to work out how much you would need to pay, how much the interest is, etc. on your loan. The Money Advice Service has a free tool on their website, and all you need to do is input the relevant data. I cannot stress enough how important it is to make sure that you can easily afford any money you borrow, because this will dictate whether or not you will be able to complete this transaction successfully.
6. Look for loans for bad credit
You may think that because you've got bad credit, that means that you are automatically stuck with bad borrowing rates, but that is not true. There are options on the market that cater specifically to people with less than perfect scores. Here are some options:
- Loans for bad credit - loans for bad credit allow you to get the best loan rates for your particular situation, as they are created especially with clients like you in mind
- Loans with no credit check - if you'd like to forgo the credit check entirely and not have your score count towards your eligibility, you can opt for loans with no credit check, meaning that your score isn't impacted by your application or borrowing
In conclusion, there are plenty of things you can do to ensure that you get the best loan rates available on the market. You just have to put in a little time and effort and strategise the way you search for financing. The work will pay off when you are able to make a deal that is affordable and advantageous for you, financially, regardless of your credit score.