How to Compare Short Term Loans
There are many different loans available and even if you have decided that there is a certain type of loan that you want, say short-term loans, then you will still have a choice of lenders. This will mean that you will be able to compare them and see which of the loans that you like the best. It can be hard to do this sometimes though, especially if you are not sure what you are looking for. It is therefore a good idea to think about what your priorities are with regards to borrowing and then you can choose the loan which fits in most with that. There are all sorts of things that you might find important but some of the main ones are below.
- Cost – for many people the cost of a loan is the most important thing. They will have a limited budget and therefore want to make sure that they are not paying back more than necessary. Obviously, lenders will vary in how much they charge, this will be in three key areas. The interest rate, the fees and the late repayment charges. It is easy to just compare the interest rates and forget about the rest and so you need to be careful. If you are comparing percentages then use the AER which takes the fees everyone has to pay into consideration. Otherwise use the calculator on the site to work out exactly how much you will need to repay and then you will be able to compare these amounts. Finding out what the late repayment charges are could be trickier. You might feel confident that these will not be relevant to you anyway but it is worth being aware of how much they are. Not only might this help you to choose between lenders but it may motivate you to make sure you repay the loan completely as you will want to avoid paying them.
- Value for money – many people think that value for money and cost are the same thing and it is important to not get confused between the two. Cost is simply how much something is but value for money refers to what you get in exchange for what you pay. For example, if two bags of crisps are the same price, you would not pick up a random one, you would look at the size, brand and flavour to decide which one you felt would give you the best value for money. You may even decide to buy a dearer one because those two are not a flavour that you like. The same applies for everything that you buy and you need to look at the different loans available and see whether there are some that stand out over others for reasons other than their cost.
- Customer service – one thing that might be important to you is customer service. Lenders will have a customer service department where they deal with queries and you will probably want to make sure that you can get through easily using a means that appeals to you. This could be by email, phone, online message or whatever. Then you will want to get a fast response which is informative, helpful and accurate. To test this, you will need to get in touch and see how impressed you are with the response that you get.
- Reputation – for some people it is the reputation of the lender that is important to them. They will want a lender that perhaps they have used before or at least heard of. Or perhaps they will be looking for one that is recommended by people that they know or comes up well in reviews. Think about whether this is something that is important to you and where you might find out the information that you need to judge them on this.
It might seem like a lot of work to do all of this background research. However, it can make a big difference to your borrowing experience. You could find that you will save money but also that you will get much better value for money if spend time to make sure that you pick the right lender. It need not take that long either, but can make a significant difference. If you want your experience of short-term loans to be a positive one then making sure that you pick the right loan to start with can make a really significant difference. Once you have done the research you will be able to use those skills for comparing all sorts of things and that will be very useful. It could mean that you could start to save money in all sorts if areas or feel that you are getting better value for money for lots of the things that you are buying.