Banking

Should I Use my Normal Bank When I Want a Loan?
Banking

Should I Use my Normal Bank When I Want a Loan?

When you want to borrow money, then you may wonder who to go to in order to apply for the loan. It can be tempting to use the bank that you hold your current account with. However, there are disadvantages to doing this as well as advantages and it is good to have a think about all of these so that you can decide whether you still feel it is a good idea to use them.

Credit Check

The main advantage of using your own bank is that they will not have to check your ID because you are already a customer. This could speed up the application. The also may not be so strict when doing a credit check as they will have personal experience of what you are like. They will want to do a credit check though as will other lenders. You may find that if some are not keen on your credit record they will not lend to you or they may lend at a higher interest rate. You bank  may give you a reasonable rate because they may be keen to keep your custom. Not all of them will though and so it is wise to still compare lenders as they may be some that offer a better deal than your current bank.

There are lots of different loan types out there.

Types of Loan

There are lots of different types of loan and it is important to choose the right one for your particular needs. You may find that your particular bank does not offer a loan which suits your needs really well. This means that you may need to look elsewhere and you should make sure that your loyalty to your bank does not influence you and mean that you get a loan that is not suitable for you. It is so important to make sure that you do use a suitable one or else you could end up paying more than necessary for it or not have such a good borrowing experience.  

Cost

The cost is one of the most important features of a loan and something that most borrowers will be influenced by. It is a god idea to find out how much the loan will cost in full and then compare that to other loans. It could be that your bank is able to offer you something that is competitively priced or you may be able to negotiate a better price with them if they value you as a customer. However, even if you are very loyal, you need to make sure that you are not paying significantly more to borrow with them. It is not worth paying lots more, unless you feel that the value for money you are getting is more than that with cheaper lenders.

Repayments

It is a good idea to make sure that you are aware of what the expectation ill be with regards to repayments for your loan. You will find that it can vary between different loan types and between different lenders. It is really important to find out how much it will be and make sure that it is an amount that you will be able to afford. You will need to calculate what you can afford first, by looking at your bank statements or account standing and then working out how much money you normally have available for this sort of thing. It is worth considering whether this is a typical month and whether you would normally be able to manage this repayment amount. You will need to find a payday loan from someone like Emu.co.uk which has repayments that you can afford and so you may need to negotiate with your bank to see if they can provide that for you.