Loans checklist image

Loans Checklist

A low-rate personal loan can be a great way to borrow anything from £1,000 to £25,000, while a homeowner or secured loan can offer access to funds of up to £100,000.

However much you need to borrow, it makes sense to take a few simple steps to ensure you take out the right loan for your individual circumstances.

And as there are lots of different ways to borrow money, the first question to ask is whether a loan is the best option for you.

Here, we explain how to make this decision and highlight some of the other things to check before taking out a loan.

Is a loan the right choice?

When considering how to access the extra cash you need, it is important to think about how much you need to borrow and over what timeframe.

Those wanting to borrow small amounts over a short term, for example, may be better using an overdraft or 0% credit card.

And those needing a larger cash injection may want to consider extending their mortgage rather than taking out a separate secured loan.

Have you checked your credit file?

Your credit score has a significant impact both on the interest rate you will pay on a loan, and the amount you will be able to borrow.

As rejected credit applications have a detrimental effect on your score, it therefore makes sense to check your credit file first to see whether you are likely to be approved or not.

You can do this via MoneySupermarket's credit reporting channel.

Your credit score has a significant impact both on the interest rate you will pay on a loan, and the amount you will be able to borrow.

Can you afford the repayments?

Before taking out a loan of any kind, it is vital to ensure that you will be able to afford the repayments you are signing up for.

Otherwise, you risk being hit with penalty charges, not to mention damaging your credit file and therefore your chances of being accepted for the top deals in the future.

If you have used your home as security, falling behind with your payments will also mean putting it at risk.

Fortunately, MoneySupermarket's loan comparison tables give you a clear idea of both the monthly repayments required and the overall amount you will pay back.

You can also make sure that your debts are not getting out of control using the Is your debt too much? tool.

Are you sure you have found the best deal?

Whatever type of loan you choose, shopping around for the lowest interest rate is the best way to ensure that you get the best deal.

Whether you want a personal or a homeowner loan, you can do this quickly and easily by using the MoneySupermarket Compare Loans tool to look at hundreds of different loans from a wide range of lenders.

It takes just a few minutes - all you have to do is enter a few details such as your name, your annual income and the amount you want to borrow.

So check that you are getting the best deal - and whether you are likely to be accepted - by clicking here.

Moneysupermarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.

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