A guide on how to compare loans online in the UK
With the great variety of loans to choose from in the UK, finding the most appropriate one for you can be quite challenging. There are so many factors to consider and the only way you can avoid making mistakes is by educating yourself on what each loan option entails.
For anyone who wants to compare loans online in the UK, the key factors to look out for include the terms of each option, how quickly it can be processed and the credibility of the lender among others. At the end of the day, it’s all about ensuring that whatever decision you make is based on a careful consideration of all the available facts.
The fact that online lending is one of the most competitive businesses is what makes it challenging to sort through the numerous loans and lenders available. Fortunately, there are some tips that can help you sift through the many available loans online.
Let’s have a look at some of them:
- Repayment penalties
It’s always important to take a close look at the fine print to know some of the terms of the loan that may not be so obvious. Some lenders will penalize you for repaying the loan earlier than the agreed repayment period. Although not all lenders include this penalty as part of their terms and condition, you might want to look out for it to be on the safe side.
- Annual percentage rate (APR)
Some lenders will offer you an interest rate that looks very attractive on paper but then have additional charges hidden in the fine print. The APR helps you quantify what the real cost of the loan. That means that where the percentage is high, then the cost of that loan is high and vice versa. Please note that the APR and the annual interest rate don’t necessarily mean the same thing.
- Hidden fees
Some of the fees that you may want to look out for include loan disbursement fees, origination fees, and application fees among others. These fees vary from one lender to the next and can make a big difference in terms of how much the loan ends up costing you.
- Loan Term
Different loan options have different repayment terms. A longer term means that you will have to pay more interest. However, it may also mean paying in more manageable instalments. It is up to you to find a balance between repaying your loan within a shorter timeframe and spreading the repayments to make them easier to manage.
- Don’t be too loyal to any lender
Sometimes, being loyal to any one lender doesn’t necessarily mean that you are guaranteed to get the best deal. While some lenders will offer you highly competitive terms because you are a new customer, you shouldn’t always assume that the terms will remain the same. You should always compare what is on offer from a wide variety of lenders.
The best way to compare loans online is to ask as many questions as possible and take the time to read through the fine print. Of course, you also want to ensure that you are only dealing with properly licensed lenders to avoid problems down the line.