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Comparing Low Cost Loans

Loans are available to almost anyone in need, providing that they can fulfill the criteria set by the lender. However, everyone’s situation is unique, thus it’s important to find the right product first before you apply. Nevertheless, low cost loans will help a lot especially if you want to save a big amount of cash. So when looking for a loan, the interest rate should be the top cost to be considered when comparing advances, may it be a mortgage or personal loan. A low rate often means lower costs, but to be qualified, you need to have a good, if not excellent credit rating. It sounds difficult especially since most people cannot maintain an impressive remark; however, being a responsible debtor will pay off easily. A good credit borrower is likely to have an easy online application, fixed low interests and fees, and flexible repayment terms.

What’s Considered As Low Cost Loans?

Normally, loan options that have below 12% Annual Percentage Rate (APR) are considered as low cost loans. It works almost the same as other loans: it’s the cash you borrow from a lending company or individuals, which you need to pay including the interest and fees. The main difference it has is that it costs less than any average loans you can find.

Traditional lenders are more likely to provide low cost loans but you need to have720 credit score above to be qualified. Having a strong financial history, with no records of bankruptcy, CCJs, arrears, defaults, and the like is also important. If you think that the requirement is too strict or you don’t have an excellent credit rating to start with, you still have other options to choose from. Loans secured with collateral are one way to acquire low cost loans; otherwise, you might consider peer-to-peer lending (P2P) to score cheap loans.

why choose low cost loans

After all, getting the lowest rate often means obtaining a high credit remark. Sometimes, having a good credit remark is still not enough. The truth is, only a few individuals are qualified for the loan provider’s absolute cheapest rate.

Loan companies only offer the most affordable rates to candidates who can: borrow over a particular amount; have a very high income; and has almost zero debt. In simple terms, it is often provided to a person who doesn’t need a loan.

How Applying For Low Cost Loans Work?

When applying for a loan, you might think about visiting the lender personally, especially if your schedule is not restricted. However, if you’re working during business hours or getting out of the house is not an option, you can take low cost loans over the phone or by applying online. The advantage of taking out an advance over the Internet is that most lenders have pre-qualification options, thus giving you an estimate of the interest rate you will have even without a credit check. The application is also convenient; all you need to do is fill out an application form, wait for a verification call, and once approved, you can have the money transferred to your bank account. But sometimes, that is not the case: once you submit an application form, an underwriting software will review your file and perform a hard credit check, and in some cases, you might be asked to provide additional documentation such as pay stubs, bank statements, or tax forms. Nonetheless, there’s no need to go out and you can take out your money from an ATM anytime you want once your loan application is granted. Meanwhile, you can make monthly repayments using the same bank account.

Having low cost loans is beneficial when you don’t want to spend a lot on interest and fees or you just can’t afford to do so. However, it’s still important to look more than the interest rate. There are other features that you should consider as well when looking for a loan, including:

  • Loan Security – In case you have no item of value or property to be used as a security, your options are limited to unsecured loans, which are more expensive. Therefore, it’s best to provide some sort of security to get a lower APR.
  • Loan Amount – Every lender offers different amount, ranging from £100 – £10,000. However, the maximum amount you can borrow depends on your credit score, earning, or overall creditworthiness. Your current financial situation and capacity to settle the loan will also influence the amount you are qualified for.
  • Loan Fees – There are loans that come with upfront or origination fees, which is under your APR. Aside from which, there are other fees you might want to look out before you apply, such as early repayment fees, penalties for late payments, etc. Therefore, if you want to get low cost loans, find a loan that will charge little to no fees.
  • Loan Term – Find a loan term that will match your requirements. Normally, there are low cost loans with terms from one to ten years; however, the interest rate is influenced by the length of your repayment. The longer the settlement period, the higher the interest rate applied; the shorter the repayment period, the lower the interest rate charged.
  • Processing Time – If you’re in a hurry and you need cash now, the processing time is an important factor you should consider. Certain lenders can give the fund you need on the same day you’ve applied, while there are loan providers who can give it on the next business day. For others, such as banks and traditional loans, you may have to wait for at least 10 days or even a month.

These are just some of the important criteria you should be looking at before you send an application.  On top of these, you should also consider the legitimacy of the lender. There are scammers who may claim that they have the lowest rates just to lure desperate borrowers. In the end, instead of taking out low cost loans, they are paying more without getting any financial assistance from the said lenders.

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5 most recent personal loan reviews

Review of Credit Star

Great team at credit star. Helped me out a few times with no bother at all! The new expense calculator is a great way to speed up the application too! A quick phone call to confirm some bank details and the money was in my guarantors bank in hours! Brilliant service, thanks you stars!

Review posted by Ian Yeates, Pocklington

  • Customer Service
  • Flexibility
  • Ease Of Use
  • Value For Money

Review of Loans Hub

Loans Hub are seriously good at what they do. I knew I would struggle to get a loan as have poor credit history although I work full time. My sister was happy to be my guarantor as she knows I would never leave her to pick up my debt.. that's the key to loans hub loans and why they work so well. From start to finish the process was professional and easy. I never leave feedback for anything however I felt so strongly that I should share my positive experience.... just go for it, you won't regret it!!

Review posted by Emma Maguire, Darlington

  • Customer Service
  • Flexibility
  • Ease Of Use
  • Value For Money

Review of M&S Bank

Money made simple - M&S complete all the necessary background checks, even though it may seem a lot, it is not. Its made simple by an efficient team of advisers. Money is drawn down by the underwriting team within an acceptable time frame of 2 working days. I spoke with a guy called Michael over the telephone and he was able to discuss my top up loan and within a matter of minutes the loan application was completed. Great service all round.

Review posted by Connor Brewer, Cheltenham

  • Customer Service
  • Flexibility
  • Ease Of Use
  • Value For Money
We at Loanigo source all our reviews from Trust Pilot to ensure an entirely non-biased review system.