There are lots of different types of personal loan and it can be really confusing knowing which type might be the best for you to use. You might want to understand a bit more about them so that you can decide which will be the bets for you. They will vary in a variety of ways.
The thing most people look at when they are thinking about any sort of loan is the interest rate. It can be easy to compare different loans based on how much interest you are being charged for them. This seems to be a good way to decide which is best. It is wise though to be very careful of this as interest rates do not always tell the full story. An APR means an annual percentage rate and this is the yearly interest but the lender may have additional charges as well. If it is the AER then this will include costs as well, so it will be a percentage that you can accurately compare between lenders.
This means that it might be better to compare the lenders on the full cost of the loan rather than the interest rate. You may find that you can use a calculator online to work out how much you will repay. If you know how much the repayments will be and how many you will make then you can add them up and take away the sum you borrowed to work out the cost. If you cannot find the figures, a calculator or doing these calculations feels tricky, then you can contact the lenders and they will be able to let you know. They will be able to work it out for you and you will be able to use these figures to compare the costs of the different loans. This should enable you to see which will be the cheapest for you. However, before you decide to go with the cheapest, it is worth making sure that you are getting good value for money. This is because there are other things that you should consider as well as the cost, when you are looking at which loan to take out.
It is also wise to compare the lenders based on the repayments that you will have to make. You will find that this will vary as well. It is a really good idea to take a look at how much you will be expected to repay to see what you can afford. You are likely to find that if the repayments are smaller, the loan will be more expensive because it will last longer. However, you might be prepared to pay this extra money if it means that you will be able to manage the repayments more easily. It can be a good idea to calculate how much you can afford to repay and then choose a loan which has a repayment schedule that suits you. You will need to look back at previous bank balances and this will enable you to see how much money you would normally have available and this will allow you to decide what you can afford. It can be really stressful if you struggle to make loan repayments or if you have to sacrifice other essentials as a result of making them. Therefore, this step is one of the most important as it will make a huge difference to your finances during the term of the loan.
You may also have preferences with regards to the lender that you want to choose. Some people like to go with lenders they have used before or ones that come recommended by others. Some are only interested in using ones that they have heard of. You might want to make sure that you have a lender that can provide good customer service, that has a local branch you can go in if you get problems or that you can deal with online. It is good to think about whether you have any considerations with regards to this that might influence your choice. It can seem that there will be a lot to think about and you might think that this will take a lot of time. However, you will find that it will not take that long and it will be really worthwhile. It will enable you to know that when you do pick a loan, that you have chosen wisely. You will know that you have picked the lender that will be best for you and that you know you will be able to feel confident that the loan you picked will be the best for your needs. This will give you a positive start to your lending experience and will hopefully mean that you will have a good all-round experience.