What Loan to choose?
Choosing a loan can be difficult. You may be in a rush and need money quickly. Loans take a while to arrange, but you should try to work as hard as you can to choose the right kind of loan for you. There are different loans, designed for different purposes and it is best to make sure that you get this choice right.
There are some types of loans designed for specific purposes, such as mortgages to pay for houses, car loans and student loans. However, there are quite a few loans which can be used for many purposes such as overdrafts, credit cards, personal loans and payday loans. It may be tempting to go for the easiest one or the one that your bank offers you, but it is worth making sure that you are making the right choice of loan and that it is not costing you over the odds.
If you are in need of a small amount of money, then you will need a different type of loan to if you need a larger amount. If you borrow more, then you are likely to want to pay it off over a longer time period and so a longer term personal loan is probably the answer. If you are using the loan to buy something, then you could possibly use a credit card or overdraft. If you need money to pay off a bill, then you may be more likely to pick a payday loan or personal loan.
Consider the repayment amounts for the loan. Make sure that you will be able to make the repayments when you need to. You do not want to get charged extra fees because you cannot repay the loan on time as this will really add up and make them expensive. Make sure you give this some though and if you think that you will not be able to afford the repayments, negotiate different ones before borrowing the money.
It is important to consider how much the loan will cost. Some loans are a lot more expensive than others. Many people will compare the interest rates, but it is much better to look at the total cost of paying the loan back. You can use the loan repayment calculator on this site to figure out the total costs. If it is a long term loan then it could be more expensive, as even if the interest is less, you will be paying it back over a longer time period. There also may be fees or charges that you have to pay, which you need to consider as well.
If you have a bad credit record, then you may have little choice for loans and have to go for a payday loan. These can also be best if you need money quickly and do not have an overdraft facility or credit card. It is therefore important to consider how much money you need to borrow first. Then think about the repayment amounts and whether you can afford it. You need to find the best loan that suits your needs that will cost you the least amount of money.