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Important Things to Consider When Getting a Personal Loan

Personal Loan

1. Firstly the interest rate. This point isn’t about finding the most competitive interest rate, while that does remain important. Before you do that you need to choose whether you want your interest rate to be fixed or variable. Fixed means your interest rate will remain the same for the duration of your loan term. While variable means your rates may change. You may be able to find a slightly lower rate if opting for a fixed rate personal loan but there aren’t huge differences between them. The main differences are in repayment flexibility. Generally, you won’t be able to make additional repayments on a fixed rate loan or repay the loan early. If you want to make additional repayments you may be restricted as to how much you can pay extra or you may be charged a fee to do so. You won’t find these restrictions on a variable rate loan. Decide which interest rate type will work best for you and compare rates to find a competitive one for you.

2. The second point to consider is fees. There are a few fees that can come with personal loans that can be charged at the start of the loan, such as an application fee or an establishment fee, or that can be charged during the loan term, such as a monthly fee or an annual fee. The main thing is to consider what fees you’ll be charged as part of the loan and to consider that as part of the cost. The comparison rate which is shown in finder personal loan tables will give you an idea of this cost because it includes the interest rate plus the fees.

3. The third thing you need to consider is security and that is whether the loan you want to take out is going to be secured or unsecured. Secured loans can be an option if you’re going to be purchasing something that you can use to secure the loan with, such as a car. You can also use something you already own such as a vehicle or equity in your home as security for a loan but keep in mind that if you default on your loan, the lender is able to sell that asset in order to recoup its losses.

4. The last thing we’re going to talk about is credit history requirements for personal loans. Lenders consider information in your credit file and your credit score to help decide whether you’re eligible for a personal loan. If you have any bad credit listings such as defaults, multiple missed payments, or bankruptcies you may need to consider a bad credit lender. So now you know the four most important things to consider.

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