Personal finance is a daunting thought, especially when you’re on the hunt for a loan or personal loan that suits you. A quick look on the net, flick through a paper or 5 minutes of watching TV and you will see how many financial companies are offering loans. There are hundreds. Not only are there the big banks, but there are building societies, credit unions as well as the multitude of mortgage brokers. It’s great to have so many choices, and loan options available, but seriously it can get rather confusing. It’s like a menu that is printed in another language, only this time the consequences of choosing the wrong dish (loan) can be a bit harder to digest.
With so many hidden fees and commitments tied into the deal, it can be extremely difficult to know which loan is right for you.
Don’t Rush into getting a Personal loan
When you’re confronted with so any different loan options the mere task of sorting through all of the paperwork and understanding the financial terms puts most of us off. We rush into the first personal loan that we find; this is not a good idea if your intention is to not get ripped off.
Another thing that we tend to do is ask a friend or family member who they got their loan through, we don’t usually ask what interest rates they’re paying or what fees are associated with the loan. But for some crazy reason we already trust the loan provider that they used, just because they approved their loan.
It definitely pays to shop around for a loan product that suits you. You’ll usually be paying back your loan plus some crazy interest rates for a long time, so getting the lowest interest rates possible right in the beginning can save you so so so much money in the long run.
Luckily these days we have the amazing tool of the Internet, where you can easily review all of the loan products available to you, compare their interest rates and make an informed decision without even leaving the couch.
While you’re on your quest to find the lowest interest rates, there are a few other things that you might want to look out for too.
You really want to ensure that you choose the best type of Personal Loan to match your financial situation.
There are a few things that you’re going to need to consider, are you taking out an unsecured or a secured personal loan. Also, are you looking for fixed interest rates or variable interest rates?
Let’s have a look at the various kinds of loans to begin with.
Secured loans are generally the only loan option available when applying for a home loan. In a secured loan situation, the lenders will use the property as a guarantee against the loan. The thought of losing your home is generally enough motivation for people to ensure they make payments on time. The reward for a secured loan is usually significantly lower interest rates, a big plus if your goal is to save money.
Unsecured Loans are usually the only option available to those of us that are asset poor. If you don’t have a property to act as security that you will meet your repayments, this is your type of loan. Unsecured loans are quite readily available, they’re quick to set up and there are a lot of lenders that are happy to give you the money. There is a catch though; the interest rates are generally a lot higher. It definitely pays to shop around, look out for hidden fees and extra charges. Compare a few lenders before rushing into an unsecured personal loan.
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