Money Saving Loan Tips
If you’ve decided to take out a personal loan your committing yourself to a financial agreement that will not only usually last for a period of between 1 and 5 years but also will cost you money in fees and APR charges. Thus most consumers will consider it important to try and get the best deal and save money where they can. After all a loan becomes exceptionally bad value if you pay over the odds for it and a bad deal that lasts that long is no good to anybody. So here we present five tips to save money on your personal loan and ensure you get the best deal you can in your circumstances.
The most commonly recognisable difference in how much a loan will cost you is the rate of APR or interest that the loan company will charge you. This is essentially the fee that you pay them for being able to take out a loan and how they make money. Interest rates can vary considerably over time and also between different loan companies so many people will look around for the best deal with the cheapest interest rates.
The main thing to bear in mind here is to investigate a number of different companies to see which will offer the best rate for you alongside with good service in other areas mentioned in this article. While shopping around bear in mind that the less traditional loan providers such as online companies and supermarkets may have good deals on, it’s also worth investigating the loan company you are interested in online; they often have special deals available to Internet customers.
Working out how much money a loan is actually going to cost you or whether a loan of a higher APR but with better facilities is worth considering can be confusing at times going simply by the APR rate. It’s sometimes useful to ask your potential loan provider for the total amount repayable. That way you can see in terms of how much it will cost you the difference between different loans or whether a loan is appropriate at all.
It’s a good idea to consider carefully what kind of repayment period suits you before going for a loan, particularly when considering special deals. A particular five-year deal might be great for consumers who specifically want a five-year repayment period, but if you initially wanted a three-year repayment period you might not be saving money by paying interest on your loan amount for an extra two years.
Generally speaking the shorter your loan repayment period the better off you’ll be. After all, the longer the repayment period the more APR charges you will incur. However be honest with yourself on how much you can afford to pay out each month, because a shorter loan repayment period will entail higher repayments to pay off the debt quicker.
As mentioned if you can afford it this will probably save you money and clear the financial commitment sooner but that’s only good if you can actually afford the higher repayments. Take a look at the monthly repayments for different repayment periods for your loan amount and assess what’s going to be best for your circumstances and how much leeway you wish to give yourself in the event of unforeseen outgoings.