How to compare bank loans

Whether you want to make a major purchase, buy a new car, renovate your home, borrow to invest or consolidate debt it pays to look around for a new bank loan

With the Internet making it easier for consumers to compare rates and banks’ services, consumers are certainly saving some money.

Before starting to compare banks and if they need to make an inquiry on your credit score, ask them to do a soft inquiry. This allows them to view select information from your credit report without having to register a hard inquiry and affecting your score.

The most popular loans are debt consolidation loans, student loans, car loans, RRSP loans, and business loans.

If you find you cannot afford your monthly payments on your credit cards and are only able to make the minimum payments, consolidate your debt. This will allow you to get a lower interest rate and allow you to pay off the debt in about five years.

Always ask if you can make a lump sum payment on your loan without penalties. Apply every bit of extra money towards the loan principle. You will pay your loan faster and you can start saving for big financial goals.

Loan applications are approved based on your annual income qualification and credit rating.

How much can you borrow?

It will of course depend on your circumstances. It is usually the first question many people ask themselves when considering taking out a personal loan. The answer to that varies from loan company to loan company. It is crucial how stable and large your income is.

What about collateral?

There are several major advantages to taking out a loan without collateral. Firstly, the processing time is very much faster than conventional loans in which the bank takes a mortgage on something you own.

The other advantage is that you are free to spend the money on anything.

Use a loan calculator to test your budget.

Find a good loan calculator to determine how much you want to borrow and how long you want to spread the repayment over. Then you should be instantly provided with what your monthly costs will be when you shall lend money. This gives you the ability to find the loan that best suits.