It is often advised that you compare lenders online so you do not ruin the day down the track. A lot of comparison websites provide unbiased data on interest rates, eligibility criteria, the amount of borrowing sum and additional formalities that could help you pick a lender to borrow money from based on your financial circumstances.
Most commonly, you need to look at three features such as the APR (Annual Percentage Rate), monthly cost and repayment term. Yet, many people find it all the harder to arrive at a conclusion. The fact is that finding the real rates varies from those displayed on websites because of your credit report and financial situation.
When you apply for a loan, a lender will pursue your credit file and financial records to calculate their risk. Interest rates vary by credit score, and therefore, you cannot get to know the actual rates on comparison websites, but it does not mean they are futile.
There are lots of other factors, such as eligibility criteria and fees, that help you choose the best money lenders in Dublin.
Tips for choosing the best lender through comparison websites
Undoubtedly, the best lender will depend on your financial circumstances and credit score. The higher the credit score and the stronger the financial condition, the better it is. Here are some of the tips on how you can make the most of comparison websites to choose the best lender:
1. Look out for exclusive rates
Although you cannot get to know the actual rates you will be charged when you formally put in the application, you can get to know the exclusive rates. For instance, some lenders offer attractive rates on exclusive loan products.
For some kinds of borrowers, the term could be extended, and the borrowing sum could be larger as well. Find out if you meet the criteria. Do not forget to compare these rates with that of your bank. It is likely that your bank has a way better deal to offer you.
2. Check eligibility criteria
Everybody knows the basics. It will be redundant to say that again, but some lenders clearly tell the minimum credit score they accept. While some lenders might be willing to accept your application with a bad credit score, others will not entertain you if your credit score is less than OK. Once you know this information, you can easily shortlist lenders whom you can apply to prevent your credit score from being damaged due to your inability to meet the criteria.
3. Use a loan calculator
The interest rates you will find in the comparison websites may be much lower than the actual rates as they have not been calculated after taking into account your credit rating and financial circumstances. In fact, that is not feasible at all, but there is still a way out to get the best lender offering the best loan deals.
Use a loan calculator to determine the total cost of the loan. You will get to know how much it would cost you monthly and in total. There could be a few lenders offering the same amount at the same interest rate but with a longer repayment term.
Such loans will whittle down the size of monthly instalments, and hence, you will find them more manageable. Still, the total amount will go up as interest is accrued on the remaining balance, which becomes bigger when the monthly instalment is smaller.
Leave the scope for extra money payments in that the actual rates will be quite higher. You can easily figure out now whether the payments fit your budget.
4. Find out the associated fees and charges
It does not need to be reminded to you that levied rates constitute a portion of extra charges and fees. The rates in the comparison websites cannot be APR. Make sure you get the details about additional charges. Contact lenders and inquire about fees.
If you are looking to take out a long-term loan, you can get a pre-qualifying letter without damaging your credit rating. This will likely help you understand the interest rates and fees you are charged.
5. Check if the lender is registered
Whether you are taking out small loans like quick loans for bad credit or long-term loans, it is always suggested that you check the lender you are borrowing from is registered with the Central Bank of Ireland. Only lender is permitted to provide loans and credit cards if they are registered with the financial regulating body.
You can check the registration details of lenders on their websites. You will find their registration number. However, you can even directly check the registration details on the official website of the regulating body, or you can simply ask your lender about such details.
Warning signs you must remember when you take out a loan
Even though you think you have picked the best lender offering the best loan, it does not mean that risks do not prevail. Here are the warning signs that you must know before applying for a loan:
- The actual interest rates could be higher, and the cost of monthly payments as well.
- It is not always possible for a lender to be flexible with the deals they offer. Once the term and payment size are decided, you will have to stick to it throughout the loan term, regardless of the changes in your financial condition.
- Missing payments or defaults can lead to the loss of your house if you take out a secured loan.
- Your account will go into arrears if you miss three payments in a row. This will affect your borrowing ability down the line.
The final word
The best lender is one that provides you with a loan at affordable interest rates. Comparison websites can come in handy to find the best lender, but you must remember that risks are still associated with the loan. Along with finding the best lender, it is also important to assess your repaying capacity.
Caleb works as a senior content writer at Financealoan for the past 3 years. He is a writing enthusiast and invests a good time in exploring and writing about financial trends. His keenness in exploring a topic to create a research-based piece is simply unmatched. He believes in including a texture of authenticity with real-time examples and facts.
Caleb’s blogs and articles reveal deep-seated knowledge and expertise. His educational qualification forms the base of his excellent command over the industry and Jargon. He is a postgraduate in Finance and is currently involved in exploring the world of the stock market.