There are two very distinct ways in which a prospective borrower can define the process of how to find the cheapest loan. They can consider how to find the cheapest loan in terms of the lowest monthly repayment amount or they can consider how to find the cheapest loan in terms of the total amount repayable over the full term of the loan. It may seem at first glance that the two will amount to the same thing but this will not necessarily always be the case.
The first step as to how to find the cheapest loan, regardless of from which perspective the applicant views it, is to obtain as many quotes as possible for loan agreements. There are three principal ways in which this can be achieved. The individual can visit all the banks in their locale and request that quotes be issued, they can perhaps consult the telephone directory and call the banks and finance companies or they can search online. The third option in this respect is likely to provide the most alternatives and be the quickest and cheapest way of doing so.
When the quotes are obtained, it is important that the borrower ensure they all quote a number of vital details in order that they may make an effective comparison. All the quotes should state the loan amount, the term of the loan, the interest rate, the monthly repayment figure required to be made and the total amount repayable over the term of the loan. It is only by obtaining all these details that the potential applicant may make the consideration as to which loan quote is the cheapest under their definition.
If the applicant decides that they wish to define which is the cheapest option for taking the loan by looking at the monthly repayment figure required, it is important that they at least consider the total amount repayable over the term of the loan. The quote offering the cheapest monthly repayment could perhaps be from a company willing to offer the loan over five years while others are only offering it over three years. The bottom line at the end of the day could represent quite a significant difference in terms of the total repaid.
If the applicant decides to go for the loan which is cheapest in terms of the total amount to be repaid, they simply have to ensure that they can afford to make the required monthly repayment before proceeding with their application.
It is of course important to any loan applicant to find the cheapest loan deal available to them as different companies will offer very different rates and repayment terms. Equally, however, it is important that they in so doing take all of the above points in to careful consideration.