What Is Loan Comparison?
Knowing which loan to take can make the difference between a holiday in the Bahamas and sitting on your sofa watching old TV reruns. A loan comparison grants you the opportunity to know which loan to take, especially with the different loan options and types available. Using a loan comparison platform you can always discover the loan option that best satisfies your needs as well as your abilities.
Factors to look out for when comparing loans
Can you afford it?
Do not go for a loan that far outweighs your income, no matter how much you think you need it. Compare available loans and find which you can afford before choosing. The interest rate is the main issue to concentrate on when determining the affordability of a loan.
What is the Interest rate?
The interest charged on a loan is a major determinant in discovering the loan best suited for an individual. Loans which offer a higher interest rate than you can afford should be rejected immediately. It is always important to have a predetermined loan interest limit before you begin comparing loans.
What are the Repayment charges and penalties?
Some lenders offer early repayment charges so that the borrower can quickly pay off the loan, while some lenders offer very stiff penalties for minor defaulters. When comparing loans, you should look out for the repayment charges in place, what penalties are available for defaulting on repayments etc. This will help a borrower make an easy decision on what loan to take.
Do you have property?
When obtaining a secured loan, the borrower intimates a readiness to part ways with their property should they default in repayments. Secured loans usually have lower interest rates than unsecured loans. If you have a property and are willing to take the risk, this is usually a very good option to consider. You should note that most loan comparison platforms will need to determine that your property has not previously been used as collateral in an ongoing loan agreement before providing you with accurate results of the best options.
Do you have a guarantor?
Guarantors are important when it is time to obtain a loan and you do not have property to secure it. A guarantor acts to secure the “unsecured loan” and pay up should the borrower default on payments. The guarantor is always required to have a good credit score. If you have a guarantor, you are assured of a cheaper interest rate on certain unsecured loans called guarantor’s loans.
Not restricted to high street lenders
Loan comparison platforms give a net result that compares loan options from high street banks and internet providers. This is to give the borrower the best option at all times. Conducting a loan comparison does not take more than specifying how much is needed in the loan, the kind of loan preferred and a few personal details (such as details of home ownership etc.) as specified above. Results are usually in order of monthly repayment options, though they could be ordered in other ways.