If you’re looking to borrow some money to buy a car or pay for another big ticket item you may have been wondering what the best loan for you is. AA loans are not currently available. If you took out a loan with the AA before December 2013 you can manage your account on their website.
Despite AA loans not being available at the moment there are many other lenders with a range of financial products, one of which might be the right choice for you.
As they can take years to fully pay off taking out any type of loan is a big commitment. You therefore should make sure you are getting the best loan for you and your specific needs
As with any other financial products, interest rates on loans and their terms and conditions vary greatly between the different plans and lenders. Remember the best option for you is not necessarily the best option for everyone.
You can use the calculator on this website to compare over 200 different loans from over 20 different providers, to help you see what the different options for you are.
Types of Loan
Also known as unsecured loans are a type of loan that typically allows you to borrow up to £25,000 over a variable time period. Generally speaking the larger amount you wish to borrow the lower the rate of interest, however this does not mean you should take out a larger loan you cannot afford to service or repay.
Lenders will advertise their personal loans with a Representative APR however this is not the amount you are guaranteed to get from taking out a loan with them, your actual interest rate will be dependent on numerous factors such as how much you earn and your credit history, they will also take this into consideration when they evaluate how much they are actually willing to lend you.
If you want to borrow a larger amount of money and are a homeowner a homeowner loan might be better for you. As you have placed an asset (such as your home or other property) as security banks are willing to lend more, usually up to £250,000. The actual amount you can borrow is dependent on the value of your home and how much equity you have if you have a mortgage.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. If you are at all unsure of the suitability of a particular product for your circumstances you should seek independent financial advice.
Things to think about
When thinking of taking a loan from a lender you should consider if you have any other options first. If you have any savings it may be better to use them as the interest you repay on a loan may be higher than interest you earn from your savings.
There are also other types of borrowing such as authorised overdrafts and credit cards you might wish to consider.