Is a cheap loan really the best option for you?
But isn't a cheap loan the best loan?
Not always. Just because a lender entices you in with an unbelievable introductory rate, it doesn't mean it will stay that way. The key is the small print - although it may be as low to begin with, after a few months you could be left with a huge loan bill every month after the initial rate ends, and the real uncompetitive rate begins. An adviser is always necessary when making these decisions, and they can spot a bad loan straight away. The adviser will tell you - usually when the cheap loan is too good to be true, it invariably is. Also, many people who saddle themselves with a cheap loan find they have lots of hidden charges and extras to deal with on top of the payments.
My outgoings are too much as it is, why should I want anything but a cheap loan?
Many people choose to take out a secured loan because they are struggling with other debts - the loan can be used to alleviate existing debt so your outgoings can be cut significantly. So even if you are adding a little more to your outgoings, a secured loan may still mean you are paying less. A cheap loan is not the only option and it may not be a cheap loan for very long.
Can't I just get a cheap loan now and move onto another one before the higher rate kicks in?
It's not as easy to move loans round as it is to move round credit card debt. Many people jump from one card to another or one unsecured loan to another, avoiding higher rates, but a secured loan is more of a long-term deal. It's a second mortgage, and must be treated like one, and that means a sensible decision that will help your situation and ultimately improve your finances. With more and more extras, hidden charges and exit fees, 'rate tarts' will never be able to run away from their problems, they will only make them worse.
So the most expensive loan is the best loan to take?
Of course not. The loan you choose must be the best one for your whole situation - the rate is only one aspect of a loan. You may find a cheap loan with a longer term would be better for you, or a more expensive loan with a better credit repair record would suit your situation and your needs. There are hundreds of thousands of loans out there, some cheap loans and some more expensive loans - the key is finding the right loan, not the cheap loan.
