When faced with a need, it is human nature to get desperate. When it comes to loans, desperation can throw you into unnecessary debts. That is why you need to be sober and prudent when faced with a need to borrow money onlineor from any other source. This article is going to answer the question of how do I compare loans online? Read on.
Personal Loans
Personal loans are unlimited compared to limited resources. As a result, not once will you experience a shortage of money. Deciding to go online to borrow money is not a wrong decision. Precautions should be taken to protect you from going for the wrong loan. How do you compare personal loans online?
Annual Percentage Rate (APR)
First of all, you need to have the right criteria to use for your comparison. For personal loans, the APR should form your basis for comparison. What is APR? You may ask. In simple terms, it is a percentage representing the cost of a loan per annum. This includes interest amount and all other fees spent from acquisition to repayment. In many cases, borrowers use interest rates to determine and compare the cost of loans. As much as that is right, it may be quite misleading.
Most lenders use additional costs and lesser interest rates to lure unsuspecting borrowers. APR allows you to see the actual cost of a loan. On the contrary, interest rates give you just a fraction of the actual price. Although, loans with no application or origination fees may have an APR identical to the interest rate.
For example, a lender may give you a loan at an interest rate of 10%. On the other hand, another one will provide you with a loan at an interest of 8% and an origination fee of S$250. If the principal amount is S$ 10,000, the first loan appears to be cheaper if compared based on the interest rate. Don’t you think that is misleading? What if you included all the costs and adjusted the interest rate to find the APR? You will be astonished by how tables will turn.
Repayment period
Time is money. The more time you spend paying back your loan, the more money you lose. More extended periods translate to increased APR. Therefore, it is crucial to compare the repayment periods the lender is offering its borrowers.
The faster you clear your loan, the less you spend. Although, you may have to deal with the pressure of high repayment amounts. If it is possible to get a lender allowing you to pay back faster, then do not hesitate to borrow with them.
Requirements
Some online lenders will require you to have a cosigner, among other requirements. This may complicate things for you. Getting a guarantor may be a hard task for you. It is possible, but tricky. Comparing the lender’s requirements is an option.
What is this lender asking for that I don’t have? What about this other lender? Can I get a loan without this requirement? Sometimes lenders get unrealistic with requirements. Find out which lender is more considerate and settle for that.
Lenders
There are countless online loan providers. As a borrower, you do not want to deal with unscrupulous lenders. To avoid any conmen from preying on you, ensure you do your homework on who the best lender is by name. You may decide to look at online reviews or ask for recommendations from people used to borrowing money online.
A lender may be popular for giving loans to new borrowers. Another loan provider may have a good name for overall service to the clients they serve. Why should you go elsewhere when you can rely on reviews to find a good lender by visiting Loanadvisor
Some of the general qualities that make lenders popular include;
- Debt consolidation services
- Home improvement
- Bad credit loans
Loan Calculator
APR, interest rates, amounts, and other issues to do with loans can prove elusive sometimes. That is why the loan calculator was invented. It is an excellent tool to use to make comparisons for online loans. Simply input the figures of the different loans and wait for the results. You know what ethical decision making is all about. Go for the most favorable numbers.
What you need to compare loans
For a successful comparison, you need to know what details are required. Here is a list of some of the things you need to compare loans online with ease.
- The amount you want to borrow
- The period you project your loan will be paid in full
- The amount you can comfortably pay monthly in loan repayment
After using the above details with the loan calculator, you will expect information detailing the following:
- APR
- Interest rates and other fees
- Monthly repayment amounts and period to complete making payments
Tips on comparing loans the right way
- Get quotations from different loan providers. Let the lenders provide all the information you need to know about their offers. The minimum number of lenders you should get quotes from is three. From there, you may source quotations from as many lenders as you wish.
- Avoid lenders who will place a hard inquiry on your credit report.
- Only compare similar offers.
- Look at all costs.
- Read in detail any contract lenders offer.
The Bottom Line To borrow money online is a risky move. Whether for personal use or business capitalization, borrowing is not always the best option. It is only that sometimes it is the only option. Once you have decided to take that road, then you have to do your homework well. Firstly, you need to compare your loans tactfully. Which technique will you use? One, find lenders with good reviews and narrow down to five or three. Proceed to find quotations from them and compare their APRs, repayment periods, and their requirements. Choose the best online loan provider based on the comparisons. Do not be deceived by lenders offering low-interest rates but exorbitant originating fees. Always consider all the total costs
