How to choose the right personal loan provider
If you’re considering a personal loan, the options can be overwhelming. “Does it even matter which loan provider I choose?”, you may ask yourself. It most certainly does! Not all loan providers are equal, and only the most responsible lenders have your best interests at heart.
It’s important therefore to choose the right lender for your specific needs, and one you can trust.
Here’s what to look for in a personal loan provider:
1. Interest rates, fees, and charges
The first thing you want to look at when choosing a personal loan provider are interest rates, service fees, and any other charges that might apply. As consumers, it is natural to assume the lower the interest rate on a loan, the less money you’ll have to pay back in total. At least it seems that way at first. Some providers however, will attract customers by advertising the lowest interest rates, but profit from heaps of additional charges and fees that may, or may not have been disclosed clearly.
Before choosing a loan provider, do your due diligence to find out what additional charges and fees you may incur on top of your loan amount, i.e. administration fees, penalty interest charges, missed payment fees etc. and how transparent/upfront they disclose this information. Understand that if these charges are included in the overall loan, you may even end up paying interest on some, or all of them, too.
Loan providers sometimes have charges for early settlement, find out what they are before signing up!
At Instant Finance we believe in full disclosure. Your contract will show you what you borrowed and a full breakdown of fees. It will show you that whilst the establishment fee and payment protection insurance are interest bearing, the administration fee is not. Our staff will take as long as is necessary to explain your contract to you.
Keep this in mind and be vigilant when comparing personal loan providers.
Tip: If you know the loan amount you may need, consider using a debt calculator to help you estimate and manage your repayments.
2. Customer service
Customer service may not seem like a big deal when comparing interest rates and fees. However, consider that the repayment schedule of your personal loan may take months or even years depending on the amount you’ve borrowed. That’s a long time to be dealing with a company, especially one with substandard customer service.
Personal loan lenders that pride themselves on providing the best customer service and support could be one of the most important factors to take into account, especially when considering the lifetime of your loan. Friendly, knowledgeable and supportive staff will listen to you, and go that extra mile to ensure you receive the best customer service.
3. Terms & conditions
The terms and conditions of a personal loan will cover everything from repayment schedules, due dates, and early or lump-sum payments. Your own individual circumstances will determine exactly what sort of repayment schedule is best suited for you, and your ability to repay the loan. When considering a loan provider, ensure that you fully understand their terms and conditions around payments, and find a provider that best matches your needs.
The fine print in a personal loan agreement should tell you everything you need to know, so read them! If you have any questions or a need for clarification, then simply ask. If the representative is hesitant, or vague about certain details of your query, then that may be a clear signal to consider an alternative provider.
Which brings us to our final point…
4. Trustworthiness and transparency
Some loan providers have great branding, and flash advertisements, but that’s probably not going to help find the right personal loan that’s best suited for you. You want a lender that will genuinely support you throughout the whole process and beyond and work closely with you if times are tough.
It’s all very well putting small amounts of money in your bank account within 7 minutes, but will they help you out when life takes a bad turn?
Remember, start by asking questions about the loan agreement and its terms and conditions. If a loan provider is vague, hesitant or evasive, reconsider your position. Your ideal personal loan provider should be confidently transparent and open with all information relating to your loan. They will not compromise their integrity of being a responsible lender if they believe a personal loan may lead to further financial hardship.
Another helpful method of determining the trustworthiness of a loan provider is to ask around. Talk to family and friends, take some time to review Social Media channels, or read reviews online for impartial opinions from past or present customers.
Instant Finance prides itself on having provided everyday Kiwi’s with personal loans for over 47 years. We have an easy-to-understand loan application process (both online and at your nearest branch) and a strong commitment to responsible lending. We’re happy to answer any of your questions and provide sound advice on understanding fees and responsibilities, interest rates, secured and unsecured loans, repayment plans and household budgets.
If you have any questions about our personal loans, or would like to talk with one of our friendly staff, then give us a call on 0800 760 000.