For most of us, there will come a time in our lives when we need financial help, whether that’s a mortgage to buy a house, car finance, or payday loans to help us out in an emergency. Whatever the reason, there is a wide range of lenders who can help. Ensuring your loan repayments are manageable is one of the main factors to consider when finding a lender to suit you. Read on as we take a look at a few tips to help you find manageable lending.
Types of lenders
When you think about lenders and loans, your thoughts may automatically jump to banks. This makes sense, as they have been the leading institution that provides us with additional funds when we need them. However, times are changing. Now, you can take advantage of a variety of alternative options too, that are easier to apply for and be approved for, which we will look at in more detail below.
- Traditional: These lenders are what you’d expect – banks, credit unions and insurance companies. They can help you to achieve your goals, whether that’s with your personal or business finances, and can offer you a range of loan options, and amounts. The application progress can be rigorous and time-consuming, so if you are looking for funds quickly, this option may not be the best choice for you.
- Alternative: These lenders are mostly based online. They tend to offer unsecured loans to individuals and businesses to help them with additional funds. The application process is quick and completed online. These lenders tend to increase interest rates to mitigate the risk, but they can offer a wide range of loans, even for those of us that don’t have the best credit score.
How to find the best lender for you
Knowing a little bit about both of these above lenders helps when it comes to finding out which is best for you. You’ll need to weigh up which type of lending suits you best, by considering a few factors, which we will look at in more detail below.
Think about your needs
Firstly, you’ll have to think about what you really need. Would you benefit from a bank loan that comes with lower interest? Or do you need funds quickly and do not have time to go through the process of applying for a traditional loan? This can help you to pinpoint which type of lending is best for you. Next, you’ll need to think about how much you’ll need. You should make sure you get this figure as accurate as possible before taking out a loan. Applying for more than you need means you’ll have to pay a larger sum back, with added interest – to keep it as manageable as possible, be sure to only borrow as much as you think is necessary.
Consider the repayment schedule
Depending on the lender you choose, the payment schedule may vary. Traditional banks tend to offer a blanket approach, whereas alternative lenders can tailor their terms to your situation. Of course, to ensure you’re getting the best deal when it comes to repayments, you should compare lenders first, to see which offers the best repayment schedule and terms to suit your financial situation.
Look at additional fees
You may not realise it, but when you take out a loan, you also take on additional fees, like interest. Interest is additional funds that you must pay back on top of the loan that you’ve taken out. All lenders have different interest rates, so it’s best to familiarise yourself with them when researching which lender is best for you. The interest that you pay will also be based on your current credit score and history. You should make sure you do everything you can to improve your score so that you can bring down your interest rates.
It’s not just the funds themselves that have an impact on how manageable lending is – you’ll have to think about the application process as a whole. As we mentioned previously, bank loans may require more paperwork and more of your time. Whereas online lenders keep the application process to a minimum. Make sure you compare time frames when it comes to applying, as well as the information and documents you may need so that you can find a lender that is most suited to you.