Friday 12th April 2019
With so many loan options and an increasingly complex market, it can be hard to pick the best loan for your needs. There are many different factors to consider when it comes to choosing loans. In this article, we outline the features you need to look out for when comparing loan options.
The Loan Type
There are a number of different types of loans, each having distinct features. If you’re applying for a home loan, for example, you can choose from the following:
The Interest Rates
When it comes to interest rates, low figures shouldn’t be your only consideration. You should also think about:
The Comparison Rate
The comparison rate is one of the most useful tools borrowers can use to compare different loan products and discover their true costs. It recalculates the listed interest rate to take into account the extra fees and charges. If the comparison rate is close to the interest rate, it means that the loan has minimum upfront and/or ongoing fees. However, beware that some comparison rates might be “polished” not to include variable fees. This brings us to…
Regular fees, establishment costs and exit fees can make a big difference to the repayments you’re obliged to make and the amount you can save. Don’t be afraid to ask your broker about all the charges associated with the loan, including but not limited to:
The more features you have, the more you can customise your repayment plan. These may include:
Keep in mind that these perks come at a cost – in general, a loan with features will be costlier than its no-frills counterparts.
Need help with comparing loans? Call us to discuss your options.