Having a suitable personal loan allows you to get the financial resources you want, enjoy reasonable repayments and get the best possible interest rate.
Making use of a personal loan comparator or broker who will assist you in seeking out the most satisfactory rates within Ireland would be an intelligent way to unearth an appropriate lending option that fits your budget.
“Using a personal loan comparator or broker to help find the most competitive rates within Ireland,” said Jackson Ward, personal financial advisor at Wealth Advisors . “This can be an effective way to discover a lending option that fits your budget and meets your needs.”
In order to ease your search for the perfect loan to suit your financial purposes, consider the following points:
The sum to be borrowed: Be sure to minimize the funds you borrow and don’t give in to the temptation to take out a larger loan than needed. If your loan is for purchasing something, like a vehicle, withdraw as much money as possible in advance.
The loan’s overall cost: Find out the full cost, as the final balance to be paid may turn out to be larger than you expect. Indeed, additional fees and interest rates will systematically make the financing more costly than the cash payment.
Interest rates: A lower interest rate means a cheaper loan. Our loan calculator includes each lender’s typical annual percentage rate (APR), giving you a clear picture of the costs before submitting your application.
Monthly repayments: It is possible to reduce the financial costs by extending the loan beyond a certain length of time, but the total amount to be paid will be higher. Make sure your monthly payments are affordable but don’t extend the cost over a longer period than necessary.
Repayment term: Choose as short a repayment period as possible, as the speed of repayment is critical to the cost of the loan. In most cases, personal loans can be repaid within 1 to 10 years.
Prepayment surcharge: Some lenders may have fees for prepayment, which again makes it worthwhile to think carefully about the repayment period. Seek out a lender that offers adaptable payment terms when considering prepayment.
Other fees: Some banks will claim fees for late or non-payment or even just for taking out the loan. Be aware of the fine print and any costs you may be charged over the loan term.
Your credit record: Banks may balk at approving your loan if your credit score is low.
“A low credit rating can often result in higher interest rates,” said Ward. “That’s why it’s important to work on strengthening your credit score in order to improve your chances of obtaining a loan. By doing so, you may be able to secure more favorable terms and conditions.”
Considering all of these aspects before taking out a loan, you will be better able to find a good compromise between the repayment period and a monthly economic price to obtain the most suitable loan.
Possible ways of requesting personal loans
To apply, there are several options.
- Via the Internet
- Through a banking application
- By phone
- On-site at a local bank branch
Consider applying by phone or an in-person appointment to review your alternatives and costs. On the other hand, if you know what you need, you may be able to access better rates by applying online.
Documentation to be provided
In the event of an application to your present bank, it will simply require proof of your Personal Public Service Number. The Central Credit Register of the Irish Central Bank requires this number for customer ID purposes.
If you are applying to other lenders or different finance businesses, qualifying checks will have to be carried out beyond your PPSN. Here is a list of the documentation required:
- A piece of ID, like a passport
- Evidence of residency, like an electric bill
- A document verifying your PPSN, like a detailed employment summary
- Income proof, like bank statements showing three months of your primary checking account or paystubs.
It requires that you have a checking account that can be debited automatically or configured as an ongoing transfer and that you meet the other requirements specified by the creditor.
Other options than personal loans
In case you refuse to take out this kind of loan or have difficulties obtaining one, alternatives exist.
- Second mortgage: For this kind of loan, collateral is required to reduce the lender’s risk, usually real estate. Such loans are easier to obtain if you have sufficient equity in your property and poor credit, but you risk losing your home if you fail to repay it.
- Backer loans: This formula is comparable to personal loans, except that at the time of application, a guarantor undertakes to pay for you in the event of default.
- Cash-backed loans: The money from your savings serves as a loan guarantee, allowing you to borrow an amount equal to your savings value at a reduced rate.
- Credit cards: Under certain conditions, credit cards with a 0% purchase rate are less expensive than personal loans.
“Credit cards with a 0% purchase rate can be an excellent financing option if you are committed to paying back the credit during the 0% purchasing period,” Ward said. “This can allow you to make purchases and pay them off over time without accruing additional interest.”
How does the standard APR differ?
The standard APR is the advertised rate most people qualified to borrow credit will be granted. You may be paying more than the standard published APR if you have poor credit or low income.
In the case of personal loans, a standard APR may vary according to the loan amount as well (12% for loans up to €3,999, 8% for loans between €4,000 and €9,999, for example).
Do personal loans cost less than credit cards?
It is related to the amount you borrow and the loan duration.
With a credit card, you can borrow up to a predefined limit, usually €10,000. You determine the amount to be paid per month. The faster your debt is paid, the cheaper your credit costs will be.
When used properly, your 0% purchase or credit transfer card can be a more attractive option for small amounts of money borrowed over a relatively short period. It also gives you more repayment flexibility, allowing you to repay your debt more quickly without prepayment penalties.
