When looking for a loan, many people choose to focus purely on the interest rate they are getting. In some respects, this is understandable, because the interest rate is the thing we often associate most closely with the overall loan cost. However, it is a myth that you should only focus on the interest rate when choosing a loan. If you put all your eggs in the loan basket without considering other factors, you could end up with:
- A loan you don’t really want
- Dealing with a loan company that don’t offer a great service or don’t have your best interests at heart
- Experiencing high levels of stress during the application process, even before you know whether you’re going to be accepted for a loan!
- A loan that sees you paying a significant amount of money more than you would have done had you looked closer at the loan marketplace and looked beyond the interest rate
This isn’t to say you should not look for a great interest rate on a loan, of course you should, but don’t consider it the beginning and the end of your loan search.
Here are some other factors you ought to consider.
How long do you have to repay your loan? Even if you think you can get a loan with a great interest rate, if there is a lack of flexibility with the loan periods you may not be able to afford the repayments.
When you can extend your loan over a longer period, this reduces your repayments and increases your ability to repay the loan. As a result, this may mean that you are able to borrow a larger amount and clear more of your existing debts, buy a better car, take a longer holiday, or invest in an even better range of home improvements.
Many loan providers will give you no option but to repay your personal loan monthly. While monthly payments are widely regarded as standard and aren’t a problem, if you have the option to repay your loan weekly or fortnightly this can shorten the loan period and save you money on the overall cost.
While some months you may pay more because you’ll have five repayment days rather than four, overall the cost of the loan will be lower.
Customer Service When Taking Out the Loan
Remember that you can speak to loan providers before applying, and if you have any questions this is definitely worth doing. It is also worth thinking about how you were treated and how you felt when you made the call, as this can be a great indicator of the type of service you can expect to receive.
You should also look at what is expected of you when you apply for a loan with regards to the demand on your time. At MWANANCHI CREDIT, we know how valuable your time is, so instead of you spending a combined 20 hours on the application and providing all the necessary documents to a lender, we have simplified the whole process for you.
- We provide a hassle free 10-minute application
- We tell you what documents we need upfront and first time
- We look to settle the loan within 6 hours of you applying, and will often do so even quicker
This means that with Mwananchi credit you could have a loan in your account and making a difference to your life while you would still be sending documents or clarifying details with another lender.