Finding the perfect loan is much easier than it used to be. Search engines and loan comparison sites have made the task of comparing loans quicker, simpler and more straight-forward. However, if you want to use a loan comparison site to find your perfect loan, you still need to know what to look for, what to compare, and what is right for you.
Working out what you can afford
Whether you’re applying for a home loan, a car loan or a personal loan, you need to know how much you can afford before you even start looking at loan options. Use a loan calculator to work out how much you can afford to pay back each month, and play around with different repayment schedules to work out how long you need to pay back the entire loan.
How to use a loan comparison site
While comparison sites make it as easy as possible to compare loans, you still need to know what to look for and what to compare.
When it comes to comparing loans, interest will always be important. The amount you pay in interest affects the affordability of the loan, how much you pay back each month, and how long the loan lasts. Try to choose a loan with the lowest interest over the shortest period of time.
Loans can come with a multitude of fees – especially home loans. When you are comparing loans and working out how much each will cost overall, be sure to take into account any fees you might pay.
The loan term (how long the loan lasts for) is very important. While it can be tempting to spread the loan over a longer period of time to make repayments lower, you will usually end up paying more in interest overall.
Do some research to find out what features are available for the type of loan you are applying for. Make sure your loan offers the features you need, and none of the ones you don’t. Also think about how much you will pay in fees to access these features.
Terms and conditions
Reading the fine print can be time-consuming and tedious, but it is also essential. Read the terms and conditions to avoid getting locked into a loan that’s not suitable or you can’t afford.
What to look out for when using a loan comparison site
Using a comparison site to compare loans is a great time-saving tool, however, it’s worth bearing in mind that not all comparison sites compare all possible loan options. Try using a few different comparison sites, and checking out what else is available online. Speak to your current lender or your bank to see what they have to offer, but be sure to compare their offer with what’s available elsewhere to make sure it’s competitive.
What are your other options?
Comparison sites are not for everyone. Spending time researching dozens of options is not something we all have time for – even if comparison sites do make the job quicker. Another option is to use a broker like Lend Me.
If you go through a broker, they will help you work out what you can afford and what you need, they will search for loans for you, and they will help you with your loan application and paperwork. They do the hard work so you don’t have to.