Effective Loan Shopping

The only way to get a good deal on a loan is to shop around. It’s the same advice everywhere you go. While there are many different lenders and offers on the market, different types of loan arrangements and different terms and conditions, you can always improve your position and get your self a better bargain by shopping around and really finding out what’s on the market.

Shopping around is also the best way to avoid getting ripped off by predatory lenders in the market place. If you know what kind of interest rates to expect and what kind of offers are on the market you are far less likely to make a bad or uninformed decision.

Some loan offers are extremely attractive. Advertisements speak of low rates or even zero percent loans. However, if you look more closely at these offers you are likely to uncover all kinds of hidden charges and extra fees. There can be arrangement fees, tie ins, early repayment fees, late repayment fees and closing fees. Also, most of the very attractive offers are only open to a very select class of borrowers. How often have you responded to a 3.9% credit card offer, only to find you are approved for a 29.9% card?

The other thing you should do to give your self the very best chances of getting approved for good loan rates, is make sure your credit score is as high as possible. While it will not be possible to get accurate information taken off your report, you can check up on it to make sure it is accurate.

Very frequently people’s scores can be negatively effected because of errors and inaccuracies resulting from things that should be recorded under the name of another family member, a previous occupier of your address or a total stranger who shares the same name as you. You can have your credit report corrected and all inaccuracies corrected by informing the reporting agency. They must, under the terms of the data protection act, keep the information on their system accurate and up to date.

You should also be aware of extra charges for services associated with the loan. These can often be just as expensive as the loan itself and take the whole purpose away from shopping for a good rate. For example, these days it is very common to be offered loan repayment protection insurance. While this has its benefits in certain circumstances, in many cases you will not need it and there is no point in paying extra for it.

The best advice as always is still ‘let the buyer beware’.