Independent Guide to Personal Loans

If you’re looking to take out a loan in 2017, The Independent has a “Survival Guide” to help you make sure you get the most appropriate deal for your circumstances. They point out that this may be a good time to take action –

“Whatever you need the cash for, a personal loan is often – though not always – the cheapest way to borrow cash, as long as you have a robust credit rating and the means to repay it over the term agreed. And now, with some analysts warning that the nine year run of historically low interest rates may be coming to an end, could be your chance to bag a good deal before loans become more expensive.”

But even the record-low interest rates don’t mean you shouldn’t be cautious –

“Typically, the more you borrow, the lower the interest rate you’ll be charged. (Don’t ever fall into the trap of borrowing more than you need, though. Be sure to work out exactly what your big 2017 project will set you back in advance and stick to it.)”

And you need to be careful of mis-leading promises in the adverts –

“… the market has been criticised recently for advertising deceptively low interest rates that become much higher once you punch in your personal circumstances, especially if those circumstances aren’t typical. Even being self-employed can mean your rate is significantly higher than normal or, more often, you’re simply turned down altogether. So how can you be sure of the best deal?”

And it’s worth looking at some of the new options out there. like peer-to-peer lending –

“When we asked what the best buy deals were on personal loans from £1,000 – £1,999, £2,000 – £2,999, and £3,000 – £4,999 – enough for a modest car purchase or an affordable kitchen, the cheapest deal each time was from Zopa, the original peer-to-peer lender… The advent of peer-to-peer lending has revolutionised the loan market by cutting out middle men and matching up savers looking for a better than average deal with would-be borrows hoping the beat the high street loan rates. When peer-to-peer (also known as P2P) started out it wasn’t regulated in the way as the banks and customers were initially nervous about both lending and borrowing. That’s all changed, with Uk registered P2P lenders falling under the same policing as traditional banks by the Financial Conduct Authority (FCA).”

So, if you take care and do your research, the current low interest rates could help you achieve your goals at a lower-than-usual cost.