Instalment loans can be an effective way of bridging a short term cash crisis, provided you are confident of being able to pay the loan back in full and on time. However, before applying for an instalment loan - and assuming that you’ve already explored other options first - it’s definitely worth shopping around to find the best deal you can. Finding the right lender is every bit as important as deciding on how much money you’re going to borrow. Here are a few things to bear in mind when looking for loans online:
Search long and hard
You may be lucky and find the ideal lender straight away, but even if the terms and conditions look attractive, resist jumping straight in. Keep on looking and you may find an even better deal. The online loans business is very competitive and there are plenty of lenders out there, so be willing to spend a couple of hours doing your homework. Every pound less you have to pay is worth it!
The devil is in the detail
Responsible lenders are upfront about their terms and conditions and spell everything out clearly, leaving you in no doubt about how much interest you will pay on the sum you borrow and what penalties you’ll incur for missing a payment. When browsing sites, make sure all your questions can be answered. By law, lenders have to be specific about the terms and conditions of the products they are offering but some lenders make the details more accessible than others.
Can you pay off the loan early?
Responsible lenders are flexible and will make it easy for you to pay off a loan early and save yourself some money in the process. Always try and avoid instalment loans that include a clause that ties you in for the duration of the loan term. If this aspect of the loan isn’t clear, make sure you have all the facts before signing on the dotted line!
Borrow only as much as you need
Once you find the lender that is right for you, resist borrowing any more than you need to. Borrow only as much as you know you’ll be able to pay back, no matter what else happens!
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk