Loan comparison, part two

So we have reached the point in which you are able to go deeply into comprehensive charts that provide you with information on rates, types of loans, modes of dealing with them, time of payments and periods of installments. What is it that will make you decide? How are you supposed to make a decision? Are loan comparison programs reliable enough to leave your hands and your future on them? Well not. Although technology has been a fine instrument, we should note that in this case, more than any others, you should seek for professional help. You may wonder why, or think that with this point of view those programs in charge of dealing with information you provide and figures you note down are not useful at all; in that wondering you may also think: why, then, do these programs work, why are there so many companies offering these services? Well, actually the point is that loan comparison programs and charts are complementary with those professionals that should help you decide. That’s why when you decide to take a loan for whatever aim, you should, firstly, make use, take advantage of the charts provided by these companies that usually provide them for free. Then, with that information, go and see a professional coming from the financial world, so he or she can give you appropriate advice on what to do to succeed and get the best loan in the market. Sometimes, having an impartial view from outside is the best help you can get. As we have said before, a huge amount of data is needed to have the most accurate analysis possible. Type of interest, amount of installments, period in which you should repay, possible bonuses, credit history, record history of bills, among many others, are all data required by enterprises helping you calculate and compare loans. In some cases, you will have limits on how much money to borrow, in some you won’t; in other opportunities you may be entitled to a fixed rate, in others to a variable rate (we’ve explained the difference in other articles: the first one never varies, the second one varies with the market fluctuations). To sum up, every data needed should be in your hands before applying for a loan. That will make you also stronger when having to deal with companies: it’s always worthwhile to be informed rather than not.

The last point we would like to cover regards the limit of time in which you might be imposed to take the loan. This is another crucial element, as sometimes companies will set a maximum amount of years possible to repay the money being lent by creditors: five, ten, twenty-five, are the most comon periods provided by several enterprises. We should note here that you need to think very well how much time you will need to take to repay the loan, as having it done in a period of say twenty years will give you more peace when having to face quotas, but will also have attached to the creditor for that period of time, as most loans don’t give you the opportunity to cancel them beforehand. As well as that, you may also need to think that repaying in twenty years, although the less money per installment, will involve a very huge amount of interests (i.e, with a 20 per cent annual interest, in 20 years you’ll be repaying the 400 per cent of the amount borrowed; whereas in five years you will be repaying the 100 per cent of the amount borrowed). Those are all elements you have to consider before going into a loan, and they are part of the loan comparison process, the thorough analysis you should make to decide which loan to take.