Comparing and bidding on loans can seem difficult, even though there are many different loan services on the market. This paper summarizes the key factors affecting loan comparisons.
It is a good idea to start loan consolidation by finding out the outstanding balances of your existing loans and the monthly repayments on individual loans. Not all loans may be worth combining if the amount of the loan to be combined becomes very large or if, for example, a low-interest car loan is included.
Once the total amount of the loans and the amount to be repaid are clear, a new installment to suit your situation needs to be determined. An appropriate loan repayment is one that allows you to handle other mandatory payments without any problems. The amount of the repayment is influenced by three things: the loan amount, the loan repayment period, the interest rate and other expenses. By extending the loan period, a single monthly installment is reduced, but at the same time the total cost of the loan increases throughout the loan period. It is good to remember that the loan can easily be repaid faster than the original schedule. Extending the loan period during the loan contract can be difficult and usually involves some additional costs.
Bidding offers can be solicited directly from various banks and financial companies, or you can use loan bidding services. The competition services forward the loan application to several companies at once and seek to obtain several loan offers. This makes it easier to apply for loans but also carries some risks.
Before using the competition service, it is a good idea to familiarize yourself with the company’s operations and pay particular attention to the number of partners in the service. In order for the competition service to truly benefit the customer, there should be at least 10 companies that are competing for tender.
Also, some comparison services do not show all loan offers to the customer, but select 2-3 recommended offers. There is a risk that the customer will not be shown the most advantageous offers, but will try to guide the customer in choosing a particular loan company.
So where do you recognize a reliable loan service?
Good signs include, for example, a clear listing of the companies involved in the service, contact information for the company (not just an email address), history of the company, and comments from other customers.
Once a suitable loan service has been found, requesting loan offers is done by filling out an application on the loan service website. Offers will arrive almost immediately, but within a few hours of submission. Different criteria can be used when comparing bids.
The loan amount offered may sometimes differ from what was requested in the loan application.
The interest rate and other costs of the loan will affect the actual annual interest rate of the loan, which will allow you to compare the total cost of the loan. The third benchmark is the monthly repayment of the loan. The monthly repayment must be appropriate to your situation and allow the loan to be properly settled throughout the loan period.