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Do's and Dont's of Personal Loans

With hundreds and maybe even thousands of loans and mortgage products on the market at any given time, where do you even begin to start looking?

The important thing is to shop around but what follows is a list of fundamental 'Dos' and 'Don'ts' that should point you in the right direction.

Obviously the best advice to anyone looking to apply for a loan is to shop around for the best and most suitable deal available. To help here are a few dos and don’ts that will help you on your quest for the right loan for you and your circumstances:

Do:

• Look out for the TAR, the Total Amount Repayable. This is the amount once interest has been added. Many get sucked in by the funds available to them, but don’t realise the amount they have to pay back. Depending on the loan and the interest the TAR could be a staggering amount. Obviously the lower the TAR the better the deal.
• With the way the economy is at the moment its probably a safer option to choose a fixed rate of interest rather than a variable one. The main advantage of this is that you will be able to budget your finances much easier, and should interest rates rise you won’t be in for any unexpected surprises.
• Remember to double check your contract before making any commitments. Find out if there are any penalties for early repayment.
• Typical APR’s? Watch out for the typical APR slogan. Typical is only typical providing everyone is the same. However this is not the case. The APR will vary depending on your financial situation and your credit history, so find out simply by asking your broker.

Don’t:

• If you’re going to shop around for a loan don’t bother going to your local high street bank. Generally it’s much cheaper online because online lending companies don’t have major business overheads like high street banks do. It’s also much easier to compare rates online.