What do you look for whan applying for a loan?

 

You should look at APR, interest, repayments when applying for a loan.

Here are some things you should look at.

Are you borrowing what you need?

Are you borrowing what you need?

Is what you want to spend the money on essential?

 

Could you wait and save for what you want? Better to ask what you need to borrow than how much you can borrow.

How long will it take to repay?

How long will it take to repay?

Longer term loans with lower repayments might cost you more in the long run.

 

Choose the shortest term that you can and manage the repayments..

What are the repayments?

What are the repayments?

Your repayments will depend on how much the loan is for, how long you agree to repay it over, the agreed interest.

 

You should make sure that by taking out the loan you are not overstretched and can afford the repayments.

What interest will you pay?

What interest will you pay?

Your loan repayments will include interest payments (This is called Cost of Credit) and is the amount you pay as your charge for getting the loan.

 

Add this amount to your original loan and this is what you will repay altogether.

 

Unlike most lenders, a Hoot loan charges interest on the reducing balance. This means that, instead of front-loading the interest onto your loan, interest is charged daily on the reducing balance; so you pay back less in the long run.

 

Are there any extras?

Are there any extras?

Many loan companies will charge you if you make a late payment or pay your loan off early.

 

Some also charge a setup or admin fee. With a Hoot loan there is no setup fee, early repayment or late payment charges. In fact, if you pay your loan off early you will save on interest!

Look at how much you repay in the end not the APR%

Look at how much you repay in the end not the APR%

Interest is usually expressed as APR%, which stands for ‘annual percentage rate’ and includes any fees and charges on the loan.

 

You can use APR to compare similar loans because it gives the interest rate of the loan as if you are paying it over a whole year.

 

The interest, plus charges is stated as ‘Cost of Credit’

Are you comparing like with like?

Are you comparing like with like?

APR% will help you compare loans but you should remember to compare only loans that you would be eligible to get.

 

For example, if you have a poor credit history, comparing with a bank loan with a low APR% that you would need an excellent credit rating for, wouldn’t give you a true picture of what your options are.

Who are you borrowing from?

Who are you borrowing from?

Are you sure that they are a responsible lender that treats you as an individual?

 

Are all their decisions automated or will they look at your particular circumstance to consider whether a loan is right for you?

 

Credit unions are member focused lenders that put your needs before profit.