Loans are serious financial commitments: Before you take out a loan you should access your personal finances to work out whether or not you can afford to take out the loan you want.
- Know what the risks are: It is important that you remember that with any loan there is an element of risk involved and if you fail to meet the terms of the loan you could find yourself in a debt situation and you could damage your credit rating.
- Research is key: There are some really great loan deals on the market but you have to take the time to research. Using online comparison sites can be really useful because you can easily compare different loans against each other and easily view all the features of different loans. Make sure you always read the terms and conditions fully before applying.
The interest rate: The interest rate is the most important aspect to consider but please note that because you are considered to be more of a risk by lenders you will find that the interest rate is higher if you have a poor credit history. The Annual Percentage Rate or APR is the best rate to look at when comparing lenders. There are many aspects that can affect the interest rate on a loan. The longer it takes you to pay back the loan, the more you will pay in interest.
