Avoid Being Hung Out To Dry With A Bad Loan Deal

With adverts about loans being commonplace on the TV, radio, magazines, online and in newspapers, it certainly appears that getting a loan is easy, while often also suggesting it’s a good idea to get into debt for the sake of a luxury holiday or a new car. 

While the TV and other advertising mediums might suggest it’s easy to obtain a good loan deal, it’s a fact that there are as many bad deals as there are good ones. A quirky TV ad does not a good loan deal make, so it is advisable to seek impartial advice when choosing a loan, and not to get sucked in by clever advertising techniques. Unfortunately, many people fall into a debt trap after having taken out a loan without first giving the decision due consideration, or seeking the appropriate advice.

Because no two persons are alike, there is no single loan deal or provider which is suitable for everyone – there is no ‘one size fits all’ product when it comes to choosing a loan. Finding the right deal is dependent on a number of factors, including the borrower’s individual needs and circumstances. 

To find the most suitable deals - those that come with a competitive rate, do not try to underhandedly sell payment protection insurance and have manageable monthly repayments – customers should compare the many different loan deals available to them. 

There are a number of different loans to choose from, including unsecured loans, which are suitable for tenants or homeowners that have a relatively good credit record; homeowner loans, for people who own their home; car loans; payday loans; debt consolidation loans, the list appears endless, but the right loan will depend on whether or not the applicant is a homeowner, how long they want to borrow the money for, and their credit status.

Although they are usually more expensive, even people with a bad credit history - those people who have missed payments in the past, gone into arrears on other debts, or have CCJs – can get competitive deals on a loan, and there are companies which specialise in providing bad credit loans. 

Using comparison sites, discussing loans in forums or blogs, and reading up on the different loans available not only saves time and money, but can also help borrowers avoid some of the common pitfalls of taking out a loan. These include such factors as buying payment protection insurance unknowingly, and not fully understanding that lenders can sometimes adjust their interest rate to include the cost of things such as PPI without the applicant’s knowledge. 

Individual research is a necessity, but it is also advisable to speak to an expert. An independent advisor will be able to help clarify the details of any particular loan deal, explaining the advantages and disadvantages, so you don’t get caught out.