Tips For Borrowing Money - Unsecured Personal Loans Online
By Jamey Wheeler
There seems to be no end in sight to this economic downturn we are in which is leading people to look for creative ways of borrowing money. In this day and age of instant gratification and 140 character communications, it should come as no surprise that more and more people are looking online for short term loans.
The following are a just a few tips to keep in mind when deciding to take out an unsecured personal loan online.
1. Shop around
As you would for any big purchase, it only makes sense to shop around for a loan. High street banks have to compete with online lenders, who likely have lower overheads, so the traditional visit to your local bank for a loan may be a thing of the past. There are numerous websites, such as uSwitch and Which?, that will do the initial comparing for you in order to narrow down the field for larger, unsecured loans.
2. TAR vs. APR
When it comes to loans, everywhere you go you see or hear about APR or Annual Percentage Rate. Because lenders legally have to display their APR, they try to find clever ways to make the APR on display as low as possible. When it comes down to it, you really should be concerned with TAR - Total Amount Repayable. When comparing loans and deciding if you can afford to borrow money, the wisest thing to do is to look at what your monthly payment will be and to figure out the total amount you will have repaid at the end of your loan. TAR is more important than APR, hands down.
3. Early repayment
If your monthly payments are manageable from the outset, you may be able to afford overpayments on your loan in order to pay it off early. You'll want to check the fine print to make sure that there is no penalty fee for early repayment. The bank will make less money off of you, which is why they created this fee, but you'll be saving yourself a bundle in interest if you can repay early.
4. Only borrow what you need
The best laid plans of mice and men...You had the best intentions when you first thought about taking out a loan. You dreamt of paying off all those credit cards with high interest rates and only having one, low interest bill to pay each month and a debt-free future was turning from fantasy to reality, but you got tempted and borrowed more money than you needed, thus increasing your debt. Know how much money you need, borrow that money and do not allow a lender to talk you into borrowing any more money than you need. You're only helping them make more money off you, instead of helping yourself get out of debt.
5. Think twice about Payment Protection Insurance
Payment Protection Insurance or PPI is an insurance plan for your loan in case you can't work due to illness or accident or if you are made redundant or worse case, if you die. PPI is another way for a lender to make more money off of you and it will greatly increase the cost of your loan. On the other hand, it may give you peace of mind, but then again, insurance companies are clever and they love to find ways to avoid paying out policies. If you feel strongly about needing PPI, then shop around and do a bit of research. It's highly unlikely that your lender will have the best rate on PPI.
This is just the tip of the iceberg when it comes to looking for a loan online. Follow up on these tips and you'll likely open Pandora's box and become very knowledgeable about unsecured loans online. Take control of your finances and your future and be sure to always borrow responsibly.
Wonga offers short term loans online, 24/7. Learn more here: http://www.wonga.com/about
http://www.wonga.com
Article Source: http://EzineArticles.com/?expert=Jamey_Wheeler
The following are a just a few tips to keep in mind when deciding to take out an unsecured personal loan online.
1. Shop around
As you would for any big purchase, it only makes sense to shop around for a loan. High street banks have to compete with online lenders, who likely have lower overheads, so the traditional visit to your local bank for a loan may be a thing of the past. There are numerous websites, such as uSwitch and Which?, that will do the initial comparing for you in order to narrow down the field for larger, unsecured loans.
2. TAR vs. APR
When it comes to loans, everywhere you go you see or hear about APR or Annual Percentage Rate. Because lenders legally have to display their APR, they try to find clever ways to make the APR on display as low as possible. When it comes down to it, you really should be concerned with TAR - Total Amount Repayable. When comparing loans and deciding if you can afford to borrow money, the wisest thing to do is to look at what your monthly payment will be and to figure out the total amount you will have repaid at the end of your loan. TAR is more important than APR, hands down.
3. Early repayment
If your monthly payments are manageable from the outset, you may be able to afford overpayments on your loan in order to pay it off early. You'll want to check the fine print to make sure that there is no penalty fee for early repayment. The bank will make less money off of you, which is why they created this fee, but you'll be saving yourself a bundle in interest if you can repay early.
4. Only borrow what you need
The best laid plans of mice and men...You had the best intentions when you first thought about taking out a loan. You dreamt of paying off all those credit cards with high interest rates and only having one, low interest bill to pay each month and a debt-free future was turning from fantasy to reality, but you got tempted and borrowed more money than you needed, thus increasing your debt. Know how much money you need, borrow that money and do not allow a lender to talk you into borrowing any more money than you need. You're only helping them make more money off you, instead of helping yourself get out of debt.
5. Think twice about Payment Protection Insurance
Payment Protection Insurance or PPI is an insurance plan for your loan in case you can't work due to illness or accident or if you are made redundant or worse case, if you die. PPI is another way for a lender to make more money off of you and it will greatly increase the cost of your loan. On the other hand, it may give you peace of mind, but then again, insurance companies are clever and they love to find ways to avoid paying out policies. If you feel strongly about needing PPI, then shop around and do a bit of research. It's highly unlikely that your lender will have the best rate on PPI.
This is just the tip of the iceberg when it comes to looking for a loan online. Follow up on these tips and you'll likely open Pandora's box and become very knowledgeable about unsecured loans online. Take control of your finances and your future and be sure to always borrow responsibly.
Wonga offers short term loans online, 24/7. Learn more here: http://www.wonga.com/about
http://www.wonga.com
Article Source: http://EzineArticles.com/?expert=Jamey_Wheeler
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