John Fitzsimons looks at the crucial things to remember before you apply for a loan
John Fitzsimons looks at the crucial things to remember before you apply for a loan
If you need to borrow a serious wad of money, and a credit card just won’t do the job, a personal loan may be your best bet. However, there are a few things you need to look out for before you decide which product to apply for.
Not so typical
When looking at the loans on offer, you will probably look first at the APR that will be charged on the loan. However, it’s worth remembering that the advertised rate is only the typical APR, a rate that the lender is only required to offer to two-thirds of borrowers.
So if your credit record is less than squeaky clean, you might be one of that third of borrowers that they instead offer a higher rate to.
The lowest TAR
Far more important than the APR is the TAR, which stands for the Total Amount Repayable. This figure will be advertised by the lender, and includes every single penny you will end up paying for the loan, including interest and any other fees and charges.
Use this figure to base your decision on, and you will avoid being caught out by any nasty surprises!
Size matters
When it comes to any borrowing, you don’t want to end up paying more than you have to. This is particularly true with personal loans – only borrow as much as you need, and then choose the lowest term you can possibly manage. That way you’ll pay the least amount of interest.
There’s no point borrowing more than you need, just because you can. You’ll only end up spending it on something you don’t really need, condemning yourself to being in debt for longer than you need to be, and end up paying more than you need to. Madness!
If you are currently in the market for a personal loan, be sure to check out the current market leaders by heading over to lovemoney.com/loans.