8 tips to get a good deal on a personal loan

Whether you are juggling unexpected costs, managing debts or looking to make an exciting large purchase, it is common to take out a personal bank loan at some point in life. However, when you decide to take out a loan it is important to choose a plan that will allow you to get the most out of it. These comprehensive tips are here to help you find the right loan deal for your individual needs, and ensure you don’t pay over the odds for it.

Know the amount you want to borrow

The best place to start when finding a personal loan is to calculate the specific amount of money you will need to borrow. What is it that you need the money for? How much will it cost? How long will it take you to comfortably pay it back? If you start with a specific figure in mind, it will make the process of comparing lenders much easier. This is because different lenders come with varying charges just to borrow the same amount.

Know your credit score

Your credit history will be key in the process of acquiring a loan. Your credit history affects the interest rates available to you and the loans you can take. Generally, the higher your credit score the cheaper the rate.

Those with lower credit scores are considered higher risk when it comes to borrowing, especially if you have had County Court Judgements or have had defaulted payments. This usually means that your loan deals will come with significantly higher APR. Check your credit score through an established credit reference agency such as Experian, Equifax or Callcredit.

Compare lenders and their rates

There are many lenders on the market, all offering a variety of costs and rates. The smartest thing to do is to look at as many reliable options on the market as possible, and compare the deals on offer to find the right one for you. Many people seeking a personal loan can simply look at the top 10 loans available, this is a great place to start but most experts recommend that you extend your search further beyond these 10 loans.

When comparing loan providers, pay close attention to the loan rates on offer and the costs of the specific amount you are hoping to borrow. The representative APR quote will take into account costs that include interest and added charges. However, the representative rate is not available to all prospective borrowers and often only applies to fixed amounts of money. Before going ahead with your chosen loan provider, take a look at their application criteria and ensure you and your credit score fit the bill.

If your credit score is not so good and prevents you from accessing the very best loan deals, then there are a number of websites and companies that can assist you to find a loan that you are likely to be accepted for. Note that these loans are likely to come with a higher APR – so it is important to be certain that the repayments are still affordable for you.

Choose your lender wisely

Many prospective borrowers make the mistake of taking out a personal loan with the bank they already hold a current account with. This is an easy mistake to make, as you already have a certain level of trust and loyalty with your bank. However, this will usually prevent you from achieving the best rates on the market. A quick look on the market of potential lenders will reveal loan providers that are looking to attract new custom, and therefore offer lower APR and sometimes more flexible terms for your loan.

Consider the right loan term for you

The loan term means the length of time you will have to pay your loan back. This is a really important factor to consider to ensure that you stick to the terms of your loan and feel comfortable with your repayments.

You have already decided on the amount of money you will need to borrow, now consider how long you will realistically need to pay it back. Longer loan terms mean that you will have smaller monthly payments, but longer loan terms also come with more total interest. Choose a loan term that offers a good balance between comfortably meeting each monthly repayment, and not paying too much overall interest.

Choose a fixed interest rate

Most personal loans now come with a fixed interest rate, but it is important that you check this is the case before going ahead with yours (always read the small print). A fixed interest rate means that the interest on your loan cannot rise throughout your term, helping you continue to meet your repayments each month and avoid any unexpected costs.

Consider your alternatives

This will come down to how much you are hoping to borrow, but a personal loan might not be your only option. Some credit cards offer interest-free purchases, which could be more suited to your needs if you require a loan between £500 and £5,000. This is a much more cost-effective option, as loans this size will usually incur higher rates of interest. 0% purchase cards will allow you to borrow the amount you require and not incur any interest until after the introductory period.

Consider if you need PPI

Payment Protection Insurance (PPI) offers protection for if you are suddenly unable to repay your loan due to a loss of income. This is a reassuring option for those that need it, but it can also be an unnecessary added cost. Many loan providers offer PPI as an add-on, however, this is usually not the best deal. Decide whether you would benefit from the reassurance of PPI or not, and then shop around for the best deal.

8 realistic side-hustles for 2020

With a new year comes a range of New Year’s Resolutions, which usually fall into one of two categories – health and money. The latter usually involves saving more, or in particular, saving for a specific thing, whether that be a nice holiday, a new car or a house deposit. To help achieve these goals, we can either look to cut back on frivolous spending or start up a new side-hustle to get a few extra pennies in – or a bit of both.

Here are eight realistic side-hustles which could help you achieve your New Year’s Resolutions.

Ironing service

Let’s face it, not many people are big fans of wading through a huge pile of ironing. It’s a task many of us will put off until the very last minute, by which time the laundry basket is overflowing with creased clothing. And this is where you could take advantage and get going on a side-hustle. With just a few spare hours a week, there’s a great opportunity to offer your laundry or ironing services to neighbours, friends, family and colleagues, who may be all too willing to hand over the task for a few pounds a week. You can charge by the item, or by the hour (see this discussion on Mumsnet).

Buy and sell

Pierre Omidyar started eBay as nothing more than a hobby in 1995 and it is now a multi-billion-dollar business. Now, this might be a little ambitious for a new venture, but you can still certainly make a few pounds out of buying and selling. Whether this is from the comfort of your own home using various internet sites such as Facebook Marketplace, Shpock, or eBay, or via the more fun but time-consuming route of car boot sales, there’s money to be made for the savvy eye.

Childcare and babysitting

If you know any new parents who may be desperate for a night away from the little ones, a great way to earn a bit of money is to offer your babysitting services. The children will (generally!) go to bed early, leaving you to chill out in front of the tv for the evening – or possibly selling a few bits on your new Shpock account! If you’re qualified in childcare and can turn this from babysitting into a full day activity, where you take children out and about, incorporating educational and stimulating activities, you’ll be able to charge more for your expert services.

Pet-sitting and dog-walking

If you’re an animal lover, what better way to earn some extra pennies than by looking after someone else’s pet? Perhaps a friend is going on holiday, or you know a neighbour who is at work all day and needs a dog-walker. It only takes a few of these to build up to give you extra income, not to mention the feel-good factor and some daily exercise!

Earn from a new hobby

One of your New Year’s Resolutions may be to learn a new skill or pick up a new hobby. This is a perfect opportunity to get two for the price of one, as many hobbies and skills can be turned into money-making ventures. Crafts such as card-making, jewellery-making or pyrography can help you design and make great items to sell at craft fairs or online.

Sports coaching

If you’re into sport and physical activity, book yourself onto a Level 1 coaching course in your preferred sport to learn the basics. These are usually fairly inexpensive and can be completed over a couple of weekends or so, depending on the sport – although you’ll likely also need first aid and child safeguarding qualifications too. You’ll then be in a good position to search for sessional coaching jobs, where you can commit to anything from an hour to several hours a week at local clubs or with private coaching companies.

Tutoring

On a similar note, if you’re skilled and experienced in a particular discipline such as a musical instrument, shorthand, or a GCSE or A-Level subject, you can charge a good hourly rate for tutoring students. This can be flexible in as much as you can travel to them, host them at your house, or tutor in small groups if friends or siblings would prefer to learn together. Local Facebook pages or sites such as Tutorful can be great places to advertise your services.

Translation

For the multi-lingual, offering your services as a translator is a great way to gain some extra income. Websites such as Fiverr and Gengo are good places to start advertising your services, and often when you complete work for a client, they will return with more opportunities. Services can include proofreading documents in a different language, translating copy, transcribing and generating content. Translators for languages including French, Chinese, Vietnamese, Japanese, German, Korean and Spanish, are in particularly high demand and can earn you a handsome second income.