The kind of loan that is best for you is really dependent on your circumstances, and if you are in a good position to set the terms, or so needy of a loan that you’ll accept any terms. Advance knowledge is always beneficial in any finance dealings, so know what you want exactly, before you try to acquire it.
Firstly be sure that you really want to take out a personal loan and that you are confident that you can meet the repayments. You may have a valid reason for a loan such as for debt consolidation or home improvements. Don’t use a loan to purchase something that you feel you have to have immediately, such as the latest style television; it will cost you far more in the long term than saving for the item and paying with cash.
Check online to compare different repayment terms and interest rates, and always pay attention to added clauses. Don’t be blinded by a low interest rate if it costs more in the long term if you pay for monthly service fees, or application fees. Never take on a loan which applies penalties for early repayment, as the loan will stand as a liability whilst it is in place, and you should never be penalised for repaying a debt. Try to secure a fixed interest rate rather than a variable one so that you know exactly what each monthly payment is. An unsecured loan is going to cost you more than a secured one, but means that you don’t need to provide any collateral.
The best position to be in when applying for a personal loan is to have an unblemished credit history with a high score on your credit report. It is always recommended to check your credit report first just to ensure that any mistakes can be rectified. If you are taking a loan for the purpose of debt consolidation it may be approved if you can show you are not actually an habitual debtor, but had a valid reason for amassing debt. However if a loan is for debt consolidation do expect to pay more as obviously you pose a bigger risk.
If you are a borrower who has a perfect credit history and the means to repay a loan then you can even try to negotiate with the lender for a better deal, especially if you know what other rates are available from other lenders. If you have doubts however that your loan may not receive instant approval then you may be better off approaching your own bank first, where you already have an established account. Be aware that applications for loans, accepted or not, will register on your credit file.
If you are at the other end of the credit spectrum and have a bad credit report but need a short term loan, then you will most likely seek a loan from an advance cash payday company at much higher interest rates. If you are cautious though it is possible to actually take advantage of these companies and take a one off loan fee free, and pay nothing. Search for the online promotional offers which do not commit you to future loans, but in general avoid using them due to their high interest rates.
Securing the best personal loan for you is much easier to do if you are aware of the likely offers which will be open to you, and can demonstrate that you are a good credit risk. If you are, then remember that the lender will be as eager for your business as you are for the loan, so stand your ground and negotiate for the best possible deal.