How to Choose an Unsecured Loan Lender

Do you want to apply for an unsecured business loan for your company? Click here for 3 things you should look for when choosing a lender.

13:15 02 December 2019

When an individual or a business has decided to take out an unsecured loan then there are lots of different things they should do in order to make sure that they get the best, credible loan lender to support them and give them the funds they need. The internet is a powerful source of information. However, some of the details that you see from lenders may be misleading as they try to entice people to their company and not reveal all the small print at the forefront. When choosing a lender here are some of the things that should be considered.

Interest Rates

The repayment and interest rates are something that is really important to take into account when applying for unsecured business loans. These can vary quite significantly between different lenders and this is usually the biggest deciding factor that businesses consider when making an application.

Several different factors usually affect the interest rates that are quoted to you. These can include your current (or companies current) credit history, the amount you wish to borrow and the length of time that you are looking to borrow over. If you have a particularly poor credit rating, then the lender will offer the loan at a greater interest rate. The reason for this is that they will see the loan as a greater risk. Usually, the more you are looking to borrow, the lower the interest rate and also the shorter the amount of time you wish to borrow the money over will also decrease the interest rate.

Reviews

Although there can be some credibility issues with information on the internet, checking the chosen lender on the review sites or forum could be worthwhile. Here you will normally find a “star” rating where this helps you make a judgement on the company. The comments supporting this will give you some guidance as to what people have said about their experiences with this service. You can usually interact in these sorts of forums and ask specific questions to customers. Word of mouth is also a good way to get information from people about their experiences. Maybe ask some friends, colleagues or family members that have been involved in taking out business loans before and get some information as to who they used and what they thought about the company.

Hidden Fees

Make sure that you read all the small print of any lender to see if there are any hidden fees. Some of these can include set-up fees and early cancellation fees. In terms of the early cancellation fees, there are times that this can be a significant amount of money. Therefore, before signing on the dotted line, make sure you comprehend these details. Once the contract is signed, if you want to repay the money earlier you could find that you pay a hefty amount in fees.

Trying to find the right unsecured loan lender for your business is going to take time. Make sure you have found one which suits the needs of your business perfectly before you commit to it.