You just decided to renovate your house. Now you have to decide how to finance this investment. In the current context of very low interest rates, you are thinking of borrowing the money you need via an instalment loan.
How to proceed?
1. Go directly to your usual bank.
If you have a preferred bank, where you do your banking, to which you entrust most of your accounts or your savings, you will probably be tempted to apply directly to it for this consumer credit.
The main advantage of this approach is to have a familiar environment and contacts. It’s also a quick way of doing things: you go to the branch, explain your application and your banker, who knows you, responds by explaining his or her main proposal. You can even, if you are impulsive, sign your loan at the end of this meeting.
On the other hand, the disadvantage of this quick approach is that you will not have taken the time to think about it, to compare the different offers and therefore to choose the most advantageous one.
2. Find out about the various credit proposals.
There are several ways to find out about credit possibilities.
You can still, as in the past, visit the bank branches in your area to explain your credit application. However, this process will take a lot of time: moving from one branch to another, waiting to be received…and you’ll end up with a pile of paperwork to read. You will, however, gain the opportunity to have direct contact with an employee who will answer your questions immediately.
Another, faster method is to use the resources of the Internet and consult the sites of online banks and brokers.
Each institution also offers a credit simulator that allows you to find out what your repayment will be for such an amount and for such a period of time, also indicating the APR. You choose the amount, the term and you can test your borrowing capacity,
This will save you a lot of time and travel. You’ll also save the planet a little bit by wasting less paper. However, you will have to work on making a comparison yourself, which can be tedious.
3. Use credit comparators
To make your search easier and to allow an easy price comparison of the different proposals, several companies have developed credit comparators. These sites give you the main information you need before taking out a loan (amount borrowed- term- taeg- monthly repayment – total repayment…).
Often these price comparators refer back to the institution’s site to allow you to make a simulation. They offer valuable help, however, they do not all use the same criteria, do not go into the details of the proposals and can thus omit advantages as well as disadvantages.
Some do not even mention the APR, even though it is an essential instrument for comparison.
4. Be attentive to all the elements
If you are looking for the most interesting borrowing solution, you should compare the different proposals term by term. There is of course the interest rate, the term allowed, the amount of monthly repayments, the total amount you will repay. But don’t forget to take into account other expenses in addition to your loan. Thus, the file fees, the possible insurances…
The APR, the annual percentage rate of charge (APR), which is calculated in the same way by all lenders in the UK, has been defined to facilitate global comparison.
It takes account of the borrowing rate, all costs relating to the credit (administrative, expert appraisal or guarantee costs), all peripheral costs relating to the product chosen (outstanding balance insurance, current account, etc.). The APR thus gives an accurate view of the real cost of a loan.
It is therefore by comparing the different APRs that you will have an exact idea of the best proposal.
To make what is only a percentage concrete, it is also interesting to add up all the repayments, to add up the file fees and other possible related costs and to compare this amount with the amount you have borrowed. This will show you the actual cost of each borrowing option.
5. Read the chosen proposal through to the end.
Comparators are inevitably limited to comparable data. However, there may be credit institution-specific terms and conditions that are not duplicated. Sometimes they do not indicate how much you have to pay in application fees.
This is the case for the lender lending platform. It offers personal loans and loans for specific purposes. This platform has the originality of bringing together loan applications from individuals and the investment wishes of other individuals.
Only a part of the fees is used to finance the platform itself. All interest is paid back to the investors. Hence the collaborative label that designates it.
Its will is to help individuals to finance purchases or projects that, without a loan, they would have had to defer. It is thus fully in line with the positive money dynamic.
Lender also has a particularly interesting proposal for borrowers, the gift in case of perfect repayment. If the borrower has impeccably repaid all his or her installments, mozzeno.com will refund part of the fees. This modality reduces the APR, but cannot be integrated into its calculation since it only takes place after the fact!
In addition, lender is the only one to offer the possibility to make by Internet all the steps of conclusion of a loan. Everything transits by the Web, even the signatures. Speed, clarity and precision are also assets of this formula.