Finding The Cheapest Loan

As the credit crunch bites, good loan deals are becoming harder to come by. That said, it is still possible to find loan bargains if you’re prepared to do your research. Here are some points to consider before making a financial commitment. 1. Take advantage of the credit crunch: Although some lenders have raised their interest rates over the last few months, others have bucked the trend in the hope of attracting more customers. Bear in mind that many banks are loosing money from the drop in borrowing, so will be keen to secure you if you seem to be a reliable proposition. Car loans, for example, are suffering from the general belt-tightening – according to research conducted by Sainsbury’s Loans, the number of people looking to buy a brand new car has dropped by more than a million over the previous six months, and this is having a knock-on effect on lenders. As a result, many banks and lenders are offering good deals on car loans, such as Alliance and Leicester. 2. Always shop around: You can only take advantage of the good deals if you spend some time considering your options. Don’t just assume that your bank or car dealer will make the best offer – instead, get a range of quotes from providers. This applies to other financial products as well. For example, you can significantly cut the cost of your car insurance by shopping around with insurers like Co-operative Insurance, as well as looking on price comparison websites. A word of warning: make sure that you don’t apply for more than one loan at a time. If you make several full-scale applications, they will show up on your credit record and could harm your future borrowing capacity. 3. Question the headline rate: Most lenders do not offer ‘one size fits all’ loans, so your quote is unlikely to be identical to the advertised rate. The majority of lenders will offer you an individual rate based on your credit score. Once you have your quote, you should check carefully what it includes. Ask whether there are any extra charges, and whether you will incur a penalty for early repayment. To compare the price of a loan, you should also ask for the total cost of the loan over the full time period. 4. Loyalty points: Once you’ve been given quotes from a number of sources, take them back to your existing financial provider to find out if they will top them. If you have been a good customer, chances are they will be keen to keep you. Although the process of comparing and obtaining quotes may take some time, bear in mind that it can save you thousands of pounds in the future – the money you could potentially save will certainly make it worthwhile.