Thinking about credit? Invest your time in a thorough comparison of offers. A survey has shown that you can save tens of thousands. How big can the differences be? And which non-banking companies outperformed the bank?
Experts has undertaken a loan survey
You will hear the importance of comparing the offers of individual credit companies and thoroughly reading contracts at every corner. Despite this, however, there are loan applicants who reach for the first offer that pops up in their browser window. A survey of the organization shows how much this is a mistake. It compared banking and non-banking providers of consumer loans and US mortgages. The differences are abysmal.
The differences are surprising
Debt issues have been addressed for a long time. Since 2009 he has been involved in mapping the market of consumer credit providers. It wants to contribute to the cultivation of the entire financial market.
The organization mainly draws attention to the large differences in credit prices. While some consumer loans can be obtained at an interest rate of 10% pa, for another company the rate of a similar financial product can be up to 250% pa .The difference is also in the web presentation of individual lenders. While some sites make it easy to get an overview with a calculator and easy-to-understand credit terms, elsewhere you still have to browse through a lot of unsavory text.
It is therefore clear that the choice of the lender really matters. How to choose the right one?
- Compare individual offers in the Loan Comparator.
- Look for reviews.
- Also consider the clarity of the website.
- Keep your hands away from incomprehensible contracts.
What parameters reveal the quality of the loan?
If you are considering a loan, you should first be interested in the price. In its research, they highlighted what a $ 50,000 loan with a maturity of one year would look like. For companies with the best offer, you would overpay the loan by about $ 100. However, there were also a number of providers who paid for the same loan and 40 000 USD, which is about ten times more. Unfortunately, there are also exceptions where you pay much more for the consumer loan than the amount of the loan itself.
Another thing that pays to watch is fees and sanctions. Even though they are now regulated by the Consumer Credit Act, it is never hurting to choose a company that will penalize you symbolically rather than one that, on the contrary, seeks to earn penalties and default interest. Fortunately, many lenders have come to understand that if a client gets into a debt spiral, increasing liabilities and disproportionate penalties will make matters worse. Also, the costs that companies may charge you for reminders are not small. For example, you can pay up to 600 USD for one. It is also good to know if you can postpone installments.
They also places great emphasis on the way financial companies communicate and the transparency of their documents. You must always have enough information to make the right decision. However, some companies will not offer you a gold platter. On the contrary. You will have to search for them in the corners of their endless covenants. This increases the risk that you will get lost in financial terms and do not choose the best loan for your current situation.
Ideally, a financial company should have a loan calculator on the site to help you figure out what your loan might look like. Also, beware of calculators that offer inaccurate information. Some will only show you the resulting credit price at a discounted rate, while others will not take into account credit handling fees or other administrative payments.
The stumbling block is also in the length of contracts. Although some companies apologize that contract documentation cannot be shortened, non-bank lenders show that the contract can be concise and clear.