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Tips For Getting The Best Deal on Your Unsecured Personal Loan

Tips For Getting The Best Deal on Your Unsecured Personal Loan

You should avoid borrowing unless you really need it, but there are many reasons someone may need to take out a personal loan, from a costly car break down, to an unexpected trip overseas. Whatever the reason, it is very important to make sure you stay informed on what you’re signing up for, and understand the quite often, tricky fine print.

With an unsecured loan, the risk is higher for the lender, so they usually have higher interest rates and fees to cover the potential downfall. Which means the risk is less for you, but the cost of the loan can be a lot higher. It can be very daunting entering the world of the finance industry and easy to fall into traps which will cost you more. So we have put together these tips to help you make sure you get the best deal on your unsecured personal loan;

  • Keep it condensed. You will never get the debt interest repayments back so the shorter and sweeter you can make it, the cheaper it will be for you. Remember; the closer you are to being debt-free the closer you are too more money for yourself!
  • Check the fees attached to the loan so you’re aware of extra costs during the term.
  • Only borrow what you need. Your lender may try to convince you to take it up a few hundred to “make it an even number”. No matter how appealing the extra money may seem at the time, you have to remember this is not free money. You will have to pay every dollar back, and it will cost you more!
  • Instead of solely looking at the APR (annual percentage rate), look at the TAR (total amount repayable) which should be all you pay if you meet your repayment obligations. Add up all the interest and fees charged from the first payment till last and compare this, for the best all round deal with each provider.
  • Make sure your loan is at a fixed interest rate. Most personal loans are but be wary of sneaky variable rate loans that could cause unexpected financial headaches.
  • If you can find a loan with generous perks, go for this over the loan with the better interest rate. Perks could include early settlement without fees, or being able to make extra payments. Make sure to read through the fine print to check for these perks.
  • Look into short-term low interest rate credit cards as an alternative. If you decide to go for this option, make sure to close account and cut up cards once you have used this to avoid getting into more debt and it affecting your credit score. Also be careful of 0% interest, as they are often main offenders of tricky fine print.
  • Make sure you shop around and look at all options on the market. Compare TAR’s, perks and make sure you are able to afford the monthly repayment amounts.

Overall, the most important thing you can do to protect yourself from unnecessary costs is to make sure you have read and understood the fine print. Do your research and make sure you understand all the technical jargon, so you can get the best deal on your personal loan.

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Disclaimer: The above information is general in nature and not intended to be advice. You should consider seeking professional advice before following any suggestions in this blog/website.