You have an ongoing project, but not the means to finance it? Whether it’s to buy a new car, finance your next vacation or do some work in your home, a personal loan is a significant help to make it happen. But to which lender should you turn? Before taking the plunge, it is advisable to think carefully about your choice in order to find the most advantageous alternative. Here are the elements to check before subscribing.
The total cost of credit
The first thing to consider when comparing credit offers is the total cost. This is, in effect, the amount you will pay in the end. Understand that if you borrow 2,000 GBP, for example, this is not the final amount you will have to pay back. The lender will add to this capital: the interest as well as possible file and insurance fees.
So if there were only one criterion on which to base your loan, it would be this one. With this element, you can rank the loan offers from the most expensive to the least expensive.
The APR or Annual Percentage Rate of Charge
The APR includes: the nominal rate, file fees and compulsory insurance costs. This figure must appear on all credit offers, including in advertisements, catalogues, posters and on the bank’s website. In most cases, a rate that is much too low is accompanied by draconian conditions that make personal credit more expensive.
The total amount of the application fee differs from one institution to another. If it is not a home loan, chances are you can negotiate with your bank. Moreover, some loan offers on the Internet make it possible to avoid it. Generally, the application fee should not exceed 1% of the amount of the loan. If you find a higher fee, it is not an advantageous offer.
Options and facilities
In most cases, conventional loans are taken out to finance major purchases. For example, it can be for the purchase of a car, the financing of major works, etc. In practice, the larger the amount, the longer the repayment period will be. In this case, you will have to anticipate what may happen to you. This is why it is essential to find out about your rights and obligations beforehand in case of a problem. Here are the points on which you should concentrate: the conditions in the event of deferred payment, the cost of late payment, the fees to be paid for early repayment.
Although credit insurance is often included in the offer and can make the bill a little more expensive, this is not always the case. And yet it is important, if not essential, to take out such insurance. What do these insurances cover? Sickness, long-term sick leave and death.