It is worth taking time to make a decision when you are picking a loan. It can be easy to just pick the first one that you see because you are desperate for the money or just do not have much time to do the research. However, it could save you a lot of money if you check out the differences between different loans.
Look at the overall cost
It is important to consider that overall cost of the loan. Many people make the mistake of just comparing the Apr which can be a big mistake. It may seem like a large loan will be cheaper than a small loan, when you look at APR but smaller loans can be more suitable as they will be cheaper. This is because you have to also compare the term of the loan. Look carefully at the actual cost of the loan. Include the fees and the total amount of interest that will be paid.
Consider the fees
There are sometimes fees for setting up a loan and lenders tend to make these quite obvious so you can consider them when you are comparing loans. However, there may be additional fees. These could include fees for not make repayments in time. Take a look at these as well and compare them between different lenders as if you think there is any risk that you will not be able to pay back the loan on time, then this will be how much it will cost you.
Can you afford the repayments
Loan repayments can be expensive. Make sure that you work out how much you will be expected to pay. This might be a small sum each month or it might be a large one off payment. Make sure that you will be able to afford this as you will be charged extra if you cannot. However, the more that you pay back each month, the lower the term of the loan which could mean it will be cheaper.
It is therefore worth considering whether a smaller loan might be better. If you are borrowing less, you will usually have less interest to pay as the repayment term will be less. It is also worth bearing in mind that while interest rates are low it is good to have a loan, but a larger loan borrowed over a longer term may still be around when interest rates rise and then the cost of it will go up even more. If you borrow on a credit card, you only have to pay back a minimum balance. However, this can lead to the temptation of not paying very much back each month and the loan can last a very long time and therefore be very expensive. Being forced to make a repayment can therefore be really useful.