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Get A Cheap Loan And Avoid The Sharks

Mar 28, 2008
It seems that almost every time you open your email inbox, another flood of messages arrives congratulating you for qualifying for a specially discounted rate for a loan. After wading your way through these messages, you then find that scattered liberally throughout the web pages you visit are yet more adverts for cheap loans that exactly fit your specific circumstances.

With so much apparent choice and variety, it can become overwhelming, and identifying which would be the best option for your individual circumstances can be a very difficult task.

There will, naturally, be a variety of reasons why you will be eligible for different rates and terms. Your employment and credit history, whether you own property and the time scale for repayment will all make a significant difference.

Another factor which significantly affects the type of loan that you will be able to obtain is the speed with which you need access to the funds, and also of course, the time period over which you will pay it back. For example, a quick and easy solution for many is the 'pay day' loan. This is where you receive a relatively small loan, that is payable from your next pay cheque. Because of the short period of time, the interest has little time to accrue, although the rate will be substantially higher than those loans payable over much longer periods.

However, the most competitive rates on the market will be for loans which are secured, usually on property. These gives the lender the reassurance of knowing that their money is reasonably safe, and that should all else fail, they have a good chance of receiving most, if not all, of the funds back. As a result, these companies will be extremely competitive, and provide far better terms.

As would be expected, those borrowers who are in well paid, full time employment and who are fortunate enough to have managed to keep a clean credit file in the past, and who have capital against which any loan can be secured, will be able to take advantage of the best rates, and are therefore advised to shop around carefully first.

For those whose credit is less than perfect, and increasingly these days there are more and more borrowers who fit this description, then the range of choice available is much more restricted. However, there are many lenders who will be happy to help, although you will find that, especially if the loan is unsecured, the interest rate will be far higher than for 'average' customers or better. Unfortunately, many people who are in such a situation and find themselves turning to lenders will be in need of the financial boost quite quickly, and don't always spend the time looking around for the best deal.

Indeed, often it is the case that the borrower is so relieved to find someone who will lend at all, that they take the first offer made. What may seem like a good deal at the time could result in being committed to paying a far higher rate of interest than was necessary, and paying far more in the long term than if they had spent more time shopping around to compare deals.
About the Author
Before you decide on accepting any type of loan over the internet, make sure you take a look at Mollie Greens' excellent guide on the various types of cheap loans presently available and where to find the best deals on cheap mortgages.
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