Having money problems is as common as air we breathe. All of us need to ask for a little help at one point or another, which is just a fact of life. When we’re looking for a source of cash, we may consider many options. The best one is always taking out a loan from our relatives. Relatives don’t charge you any fees or interest rate, which makes the loan a real gem among all the loans in existence (if you can still call it a loan – a real steal would be a better term). Unfortunately, this option is available only to few and the rest of us needs to go to a lender. There is a huge difference between individual lenders. They apply different charges, rates, service fees, and so on, thus making a loan more or less expensive. Shopping for the best loan deal is the only way to find the cheapest loan which is going to save our hard made money. That must be a misnomer, because when we borrow money, we pay for that luxury rather than saving on it. The point is that we can pay less in the end, and that’s what counts.
A decade ago when people were shopping for a loan, they had to visit each individual lender. That was extremely time-consuming and inefficient. After checking a few lenders people usually had enough of their search. They opted for the best deal they had found up to now, which, in fact, might have been not that great. Checking out ten offers doesn’t compare to a hundred or even a thousand offers. The large the pool, the larger the competition and the greater range of terms and conditions offered on a loan. Nowadays, things look much differ, because you don’t have to leave your home when looking for the best deal. The Internet is a great ally. You can check hundreds of different lending websites and see what they have for you.
If you want a cheap loan, you have no choice but put some extra effort into it. As boring as it may be, you must look at a few things in lender’s offers. Firstly, the APR (annual percentage rate), which is the interest rate for a whole year (annualized) as opposed to EAR (effective annual rate), which is a fee and interest rate combined. The lower the annual rate and fee, the lower the cost of the loan. Secondly, the term of the loan. If you take out a loan for 36 months, it is going to cost you more than a loan for 34 months. Shorter term loans might carry a smaller percentage rate. Of course, this is not so in case of payday loans, which are meant to be more expensive than other types of loans. Payday loans are taken out only for a few weeks at most. Thirdly, penalties and late fees. The best deal loans should carry lower penalties or grace periods. And last but not least, it would be great if the loan was insured and carried low insurance fee.