Personal loans are the consumer credit par excellence but also the most popular form of credit. However, it is a particularly expensive loan, compared to real estate loans or even other so-called restricted consumer loans. Nevertheless, there are tips that can help you get a personal loan at a good price.
Choosing the right time to apply
It’s never good to rush. If you want to take advantage of the best rates, you will have to be patient but also reactive. With tough competition, credit institutions often offer promotional rates for a set period of time. During these promotional periods, rates can often be cut in half. Take advantage of these promotions to get the lowest rate.
These offers are limited in time, but they also set other conditions, such as the amount of the loan and the duration of the loan. For example, a bank may offer a personal loan of £4,000 over 12 months with a rate of 1% if you take out this offer between such and such a date.
Borrow more to pay less
Credit agencies have a tradition of setting increments to change the rates charged. Thus, for a loan of £2500, the rate is 5%. However, from £3000, the rate can be reduced by half, i.e. to 2.5%. Borrowing a little more can be more interesting to reduce the cost of your personal loan.
Be careful, however, because the amount of your loan must correspond to your needs but also to your borrowing and repayment capacity.
Take into account the file fees
Each credit institution sets its own scale for determining the handling fee. As with the interest rate, credit institutions also vary the amount of these fees in relation to the amount of the loan. Thus, for a loan of £2,000, the borrower must pay a £150 handling fee, which disappears if the loan reaches £3,000.
However, these fees weigh heavily on the total cost of the loan. Here again, borrowing a little more can help you reduce the cost of your loan considerably.
Using comparison and simulation tools
Comparing offers is essential if you want to get the best conditions. To do so, rely on online tools such as the credit comparator, which helps you sort through the offers and select the ones that offer the best rates. To avoid surprises, you are also advised to prepare a loan simulation beforehand. It will allow you to determine the total cost of your credit in advance and to adjust the most suitable loan formula.