Introduction
It is important to do a loan comparison before accepting a loan offer. If you are in need of a loan, there are ways to do a loan comparison before actually accepting and signing for the loan. While you do not want a lot of inquiries into your credit report, it is common knowledge that consumers often shop around in order to do a loan comparison. So if you have a few inquiries with different lending institutions all within a short period of time, it does not drag your rating down.
Step 1
Discuss loan options with your bank or credit union. Make an appointment to go in to discuss the types of loans you may qualify for. Jot down information about each of these loans in order to make loan comparison between each of the options.
Step 2
Look into the possibility of obtaining a loan from other lenders. The Internet is a great tool to use in order to research lenders in order for you to do a loan comparison. You may be able to find better rates and fees online than you could with your bank. It is a good idea to shop around.
Step 3
If your credit report has errors or blemishes on it, ask your lender for a loan comparison on what you would pay now, leaving your credit as is, and what you would pay if you cleaned your credit up some. You may find that it is wiser to wait for a few months. During this time work on your credit to improve your score. Pay off some of your debt to reduce your credit card balances. If you can get them down to under half of whatever your credit limit is, you will see your score go up. Raising your score even a small amount, could have a large impact on the interest rate that you will pay. Your lender should be able to help you make the loan comparison by using an interest chart.
Step 4
Take some time to go over all of the information that you gathered. When doing a loan comparison you will want to take into account the interest rate as well as loan fees that you will be paying. Your monthly payment will be another factor that helps in your loan comparison. As will any penalties of fees that may be accessed.
Step 5
Choose the lender that gives you the best interest rate, fees and service. Even though you have done a loan comparison, it is still important to read all terms and conditions before you sign any papers. It is your responsibility to ask questions and to be sure that you understand any contract that you sign.
Tips and Comments
If you do not need the loan right away, it is often a better idea to fix any credit issues or pay of debt and raise your score whenever possible. This can save you a substantial amount of money over the life of the loan. This is definitely something that you want to take into consideration.
