Is it Best to get a Personal Loan from my Bank?

If you are looking for a personal loan, then the first place you might turn to is your bank. There are advantages in doing this, but you may also find advantages in looking elsewhere.

Advantages in using own bank

If you are well-known in your bank, perhaps on good terms with staff members or even the manager, then you might feel very relaxed going in to ask them for a loan. You might feel that they will be more likely to give you a good deal because they know you. This could be true, particularly if you have a good credit report, they may have a lot of respect for you and be likely to lend to you. They will also have your ID so will not need to do an ID check to lend you money. This will possibly speed up the application process. You may also feel that you trust your bank to give you a good service and feel comfortable with them. You may be happy with them because of their customer service, ethical stance, community role or other things and feel like it is the perfect thing to do, to go to them. Of course, not everyone has this good a relationship with their bank, but anyone applying to their own bank for a loan will have the advantage of not having to have an ID check.

Advantages in looking elsewhere

The personal loan market is very competitive and there are lots of lenders. This means that you will be likely to find a better deal if you look for another lender. You will be wise to therefore see what is available. You may find that there are lower interest rates, but this is not the only factor you should be looking for. It is wise to calculate the total cost of the loan and compare that cost. You should also consider other factors as well though. For example, you should be thinking about the loan repayments and whether you will be able to afford them. These will differ depending on the lender. You might find that it is better to have a loan with smaller repayments that will be a bit more costly, compared to a loan with less repayments that are larger, because it will be easier for you to manage those repayments. You also need to think about whether there are other things that might be important to you in a lender. You might want one that is friendly, has good customer service, is well-known or something else. You might also have specific features you want from the loan such as being quick to arrange, being flexible with repayments, having the ability to overpay or things like this. It is worth thinking about these as you will have a lot of quick payday loans to choose from and this will mean that you should be able to find a loan that fits with your criteria.

What to do

It is wise to compare the different loans that you have available to you. Think about what factors are important to you with regards to the different loans and that should help you to pick which is the best. We will all have different ideas about what is most important. Some people might want the cheapest loan, for example and others might be worried about having small repayments. Some might want a lender with good customer service or a nearby branch and others might want to be able to do business online. Once you have an idea of what is important to you then you will be able to compare the different lenders.

It may seem like a lot to do especially when it is so easy just to get the loan from your current bank. However, it could have a really big impact on you. If you can pay significantly less, for example this would make a big financial difference. If you can repay more easily this can make a difference to your stress levels as could going with a lender that you trust or one that has good customer service. It will not really take that long either. You should be able to get the information you need pretty easily from looking online or using comparison sites. If you are struggling then you might feel it is worth speaking to a financial advisor. Make sure that they are independent and they will be able to look at all of your options. You will have to pay them but they may be able to save your more money than you are paying them and hopefully match you to the perfect personal loan that will fulfil all of your criteria. This could be well worth their fee and it will save you a considerable amount of time which you could use working to raise the money to pay them.

Can I Trust Online Lenders?

There is a lot of mistrust in the banking industry. This comes form many different things such as memories of a few banks collapsing in the past, worry about fraud and concerns about not being able to repay loans and the costs of that. It is important to make sure that you are confident in your lender as if you are stressed about them it does not make for a very positive borrowing experience. However, you may be surprised about what you should look into to find out if they can be trusted.

Ask people you know

The best recommendation that you can get is form people that you know. If they have had experience of using a particular lender then they will be able to tell you about it and you will be able to decide whether you feel that they will suit you. People you know tend to have your best interests at heart and they will have no reason for being biased. Therefore, they will be honest when giving you help or advise and this will help you to decide whether a particular lender might be worth considering or worth avoiding. The more people you can ask the more likely you are to find a good lender that you will be able to use. You may feel a bit shy of asking people about lenders, but most people borrow money in their lifetime and it can be a really useful thing to do so there is no need to feel embarrassed about doing it. Many people would not be in the wealthy position they are if it wasn’t for the fact that they were able to borrow money, people such as home owners, for example mainly will use a mortgage to get into that position.

Look at their website

A good thing to do is to take a look at the lender’s website. You can find out a lot of information about them form there. If there is not much information on the website then you may feel like you do not trust them, but most should have something useful. You should be able to find information about the lender and contact details should you have questions that you would like answering. You should also be able to find out about the products they offer. You will get a feeling for the company form the website and this should help you to decide if you trust them as well. Contacting them can be wise, even if you have no specific questions as it will let you know how good they are at responding to queries and you will be able to get a feel for how polite they are, how quick they are and things like that.

Find out about their history

If you search for them generally online you might be able to find general information about them. Things like new stories or factual information on personal finance sites could be interesting for you. Try to use trusted sources as this will mean that you will be able to be sure that the information is more likely to be correct. If they are fairly new then this could be more difficult, but looking on personal finance sites and forums could help you to be able to find out more information.

Ignore if they are well-known

It can be really tempting to just go for a company that is well-known but this can actually be a mistake. You might think this is odd, but there are interesting reasons. Often, we have heard of a lender but we do not know why. We see the fact that we have heard of them as a positive thing and feel more likely to trust them. This also applies to advertising, where we might feel that we trust companies that we see adverts for. This is because we might have the view that if they are well-known it means they have a reputation and so have to be good in order to keep that, but actually the opposite could be true. If they are well-known they will get business base don that and do not need a good reputation to get business. This means that it could actually be the companies that need a good reputation – those that are less well-known that can be trusted more.

So, it can take quite a bit of research in order to find out which of the online lenders can be trusted. It is worth it though. If you take out a loan and are unsure about the lender then you may have a more stressful borrowing experience. However, if you feel that you can trust the lender, you will be happy to use them and feel like you will have a better experience and will be able to relax. It is therefore important to your experience and worth doing.