Best Loans

What is the best loan for you?

The best loan for you is not necessarily the right choice for someone else. This is because it will be suited to your own personal requirements and circumstances. Another person’s situation and needs will differ and hence the best loan for them may be provided by another lender. The best loan for you will be the product which overall costs you less money to apply for and then pay back the capital and interest to the lender.

The best loan is what everyone looking to borrow money will want. The best loan will by definition have a good interest rate and it makes no sense to pay a higher level of interest than you need to. Unfortunately the best loan for you on paper may not be available to you because of your credit history or the amount of money you need to borrow. Many lenders will advertise best loans with a headline interest rate, however many of these products will also have additional or hidden charges which may make the overall cost of borrowing more expensive.

Many lenders provide best loans and new products are being launched all the time. Many of the lenders with best loans are not banks or building societies but instead new entrants to the market like Cahoot or other companies now in financial services like AA. It is vital that you take the time to understand and prioritise your requirements for borrowing – this is not just how much money you want to borrow but the monthly payment you can afford, the up-front application fees you can afford and whether you will need payment protection insurance. Only when you have decided on these requirements can you research all the products available to ensure that you get the best loan available.

Is interest rate the key factor to the best loan?

Many people believe that the best loan for them is the product with the lowest APR however this is often not the case. Just because it has the lowest interest rate does not mean it will be the lowest total cost for you. This is how many lenders make their money because customers apply based only on the headline rate without doing their homework and comparing the total costs with their own requirements. Customers acting this way usually end up paying more in the long run.

The typical APR for an unsecured best loan can be as low as 6.0%. The typical rate will be higher for a homeowner or secured best loan and there are more factors to consider which can increase the total cost to you. For example, you may be offered a secured best loan with a low monthly payment but because the term is high, maybe 25 years, the total cost is expensive.

When deciding on the best loan for you it is important to be aware of the additional charges because they can have a big impact on the overall costs. Some lenders charge an arrangement fee to open a best loan when you apply. This fee will need to be paid up-front and you will need to consider whether it is worth paying the fee to get the lower interest rate and hence lower monthly payments.

If you think that you may have spare money to pay off the outstanding balance before the end of the repayment term you should review whether the best loan for you has an early repayment fee, or settlement charge. These fees can be high and you need to know up-front before you apply.

Another important factor is the payment protection insurance that you may need to take out when you apply for a best loan. This insurance will provide peace of mind during the repayment period by covering the monthly payments should you find yourself involuntarily unemployed or off work due to accident or ill health. The majority of policies also provide to pay off your outstanding balance in full in the event of your death.

The cost of payment protection insurance varies considerably from lender to lender and should be a key part of your research. You should review if the lender requires you to take their insurance and factor this into the overall costs. If not, and you want the additional cover, you should shop around for the cheapest insurance product for you. Your lender may require details of your insurance policy when you open your best loan but this is commonplace in the industry.

The interest rate is an important factor and can help to identify a range of potential best loans. However the key to you is the combination of up-front application costs, the monthly payment and the overall cost of paying back the money.

See Myloanchoices best buy secured loans

See Myloanchoices best buy unsecured loans

How to find the best loan

The first step when you are looking for a best loan is to ensure you are comparing like with like. All lenders quote a typical APR which is the interest rate that 66% of successful applicants get offered by the lender – this is enforced by the Consumer Credit Act. You need to understand your credit history because you may be one of the unfortunate applicants that is unsuccessful and gets offered a higher interest rate due to your poor history of paying off credit.

See Myloanchoices guide to credit history

There are other charges that make a big difference when looking for a best loan. For example, some lenders charge an arrangement fee when you apply. This fee for a best loan is separate to the amount of interest paid over the repayment period but you should add this fee to the total costs when you are comparing best loans. You may be better off choosing the best loan with a slightly higher interest rate but no up-front fees.

The interest rate is very important when choosing the best loan for you but it is not the only product feature to consider. Many lenders provide product features on best loans such as the facility to take repayment holidays and the potential to pay off part or all the credit early. You need to review the product criteria to decide whether these features are more important to you than having the lowest interest rate.

Before you apply make sure you think about what you want from a best loan. Make a list of your requirements. How much money do you need to borrow? What monthly payments can you afford? How many years do you want to pay the money back over? Would you like to manage your best loan online? Is there a possibility of you having spare money at a later stage to pay off part or all of the outstanding balance? Are you happy to borrow from any financial services company or will you only consider a best loan from a well know brand? All these things are important and can influence the best loan for you.

Myloanchoices offers impartial information and search services on best loans to help you decide what product is right for you. You can use our repayment calculators to work out how much your monthly repayments will be for different interest rates. You should then review our best loans and review the detailed products features of each recommended product. When you have completed your research you can apply online for your chosen best loan by clicking through to the lender’s website to start the quick and easy application process.

See Myloanchoices best buy secured loans

See Myloanchoices best buy unsecured loans