What things to consider when taking out a loan?

geek84

Hi Folks

I am thinking of taking out a loan (the very first time!), of between £3k to £5k.

Can someone please explain to me what things to consider when taking out a loan?

Are there any good websites which can compare the best deals and loan providers etc?

Finally, what is an A.P.R?

Thank You.

CLAPTON

things to consider

why do you need a loan?
why haven't you saved up for whatever it is
if you can't save up for it how can you afford to make the repayments
what does your credit file say
look at the APR.. the lower the better
what period are you looking at .. the shorter the period the greater your monthly payment but the more interest you pay overall

The APR is the annual interest rate
so if you borrow £1000 at an APR of 22% for a full year (i.e. make no repayments ) then you pay £220 in interest; in practice of course you have to make monthly repayments

paddyrg

If you don't know if it's £3k - £5k, you need to do your homework first. If you MUST take a loan, take £3k. Seriously, you'll be much much much better off in the long run if you save as opposed to borrow :-)