Borrowing money is a big decision. Many people take out a loan via companies like Emu.co.uk perhaps just using their own bank or one that they see advertised, without thinking much about whether it is the best loan rate. It is really wise though to do your research first. Loan rates can vary a lot and you should be checking carefully before taking out a loan to make sure that you find the best possible ones.
There are many places and ways to do your research on this. Some people choose to pay a financial advisor to help them. Although they do have a great knowledge and will be able to show you the cheapest rates, you do have to pay them and this could put a lot of people off. If you are borrowing a significant amount of money, their fee may be offset by the savings that you could potentially make but usually this would not be the case and you would be better off doing the research for yourself. It is fairly easy these days to get a good idea of the best rates.
Comparison websites are a place that many people will look. These compare a number of lenders and will list them in order of rates with the best rates at the top so that it is really easy to see which to go with. It is wise to be cautious though as they do not tell the full story. These sites will not compare every single lender, many choosing to just list those which give them the highest amount of commission. There are some websites which do look at all lenders though and you should take a look for those.
You may wonder whether it really makes a big difference to worry about finding the best rates. However, if you do the maths and compare the amount of money you will be repaying in interest between the different rates, you will see that it can make a huge difference. The more money you are borrowing and the longer the term; the bigger the difference it will make. It is worth thinking about whether you want to tie yourself in to a fixed rate so that you know how much you will pay each month and avoid the impact of any rise in interest rates or go on a flexible variable rate so that you can change lenders if you find a better rate and your rate may go down if interest rates go down.
It is worth noting that not all applicants will get the advertised rate on a loan. This means that you will need to make sure that you check this before you make a firm decision as to who to go with. Lenders will look at your credit record and if they feel that you are a risk, they will not give you such a good rate on your loan. Therefore, if you pick what you think is the best rate, you could find that in fact it is not the best rate once you speak to the lender about it. However, as all lenders look at your credit rating they may all change the rates they offer compared with their advertised rates, but they may not all do it in the same way. Therefore, if some offer very close rates then it can be worth speaking to them all in order to find out which will give you the best rate.
There are other factors as well as rates that some people consider when they are taking out a loan and it is good to be aware of these as well. Firstly there are other costs as well as interest to consider. You may feel that interest is more important, but while interest rates are low, other costs can also make a significant difference to the total cost of the loan. These can include any fees for opening the account, perhaps administration fees, early redemption fees, for paying the loan off early and charges for missing a repayment or making a late payment. It is worth finding out about all of these types of fees for any of the loans that you are interested in so that you are aware of the charges and you can allow for them when you are calculating which you will find the cheapest.