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How to Compare Any Purpose Loans
The most well known and diverse loan of them all, the any purpose loan can be a great way to get your hands on some extra cash, whatever your circumstances and whatever your reasons.
All it takes is a quick application and you can be on your way to buying that new car, stereo, kitchen, holiday you've been dreaming of.
Any purpose loans are good for:
- Different financial situations
As these loans are available in secured or unsecured format they are the ideal multi-purpose loan for any situation and any borrowing requirements.
If you have a steady financial history and good monthly earnings you will be likely to be considered for an unsecured loan on your credit history alone, with no need for your loan to be backed up by any collateral, such as your home.
However, if you have had trouble with borrowing in the past, or perhaps been refused credit elsewhere and you are a homeowner, it is likely that you will be able to borrow money levied against the value of your home.
- Any borrowing needs
Unlike many loans which specialise in a particular borrowing area, these loans are useful for almost anything.
Typical reasons for taking out an any purpose loan include:
- New car
- Home improvements
- Travel
- Wedding
Any purpose loans are unsuitable for:
- No property and a poor credit history?
If this is your situation, then you will fall into the only major catchment that these loans don't cater for, as the lender will require at least some form of security in the money they have leant, be it a trustworthy credit history or a house they can use as collateral.
Don't despair though, there are plenty of people in this predicament and therefore there are loans especially designed with you in mind. Check out our bad credit loans section for loans with less stringent guidelines.
- Rocky finances
If you are still in a state of perpetual financial turmoil then an any purpose loan is unlikely to be a route out of the trouble. It is important to steady your finances first before taking on more borrowing.
If you are, however, in debt difficulty check our debt consolidation loans page, for loans designed to alleviate the problem.
Look for:
- The best deal
Compare the various companies available and what they are offering. Go to our any purpose loan comparison page to make the job effortless.
Remember: When comparing companies, the interest rate is top of the agenda - as this is the ultimate factor that governs how much money you will repay - so make sure you are clued up as to the technical jargon companies band around.
Typical vs. Set
If an interest rate is described as 'typical' it will be the rate that is offered to the majority of applicants (usually 2/3 of those who apply). The rate you are offered could be better or worse depending on credit score and earnings, amongst other factors.
If a rate is 'set', it will be the same APR whatever your situation.
Fixed vs. Variable
A 'fixed' interest rate will remain the same from the start of your loan until the final payment, whereas a 'variable' rate will rise and fall depending on the bank of interest base rate.
Watch out for:
- Early repayment penalties
Although lenders are legally obliged to allow you to repay your loan whenever you want, they don't like it because they can't make as much interest. To combat this problem, many lenders charge redemption penalties – a one off charge (about 1 month's interest), that you must pay on top of your payment, if you wish to pay more than the agreed monthly amount.
A month's interest may seem meagre, and is almost definitely worthwhile if you plan to settle a large chunk of your loan, however, if you start paying these fees regularly the payments will begin to add up and counteract the interest you are trying to reduce.
Don't forget:
- Payment protection insurance
For peace of mind, it may be worth considering payment protection insurance, which protects you in any situation where you are unable to make your loan repayments, such as sickness, accident or unemployment.
Compare any purpose loans
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