The loans without guarantor are surely supportive and pour the fuel of funds at the time of desperate needs. No need to mention, direct lending makes these loans faster and from instant approval decision to timely fund disbursement things happen with speed. The liberty to borrow for any purpose is another factor to get inclined for the guarantor-free funding. No long list of questions on the purpose of the loan. In short, in every way, the no guarantor loans are considered convenient BUT the absence of obligation creates concern of total cost. The absence of second applicant is a great relief but that demands compensation through high rate of interest. Several other factors make a team to increase the total cost of the loan, which affects your confidence and you hesitate to apply.
The main problem is the total cost. It is necessary to deal with this problem as to take a carefree decision the obstacles should be removed.
1. Find the Lowest APR
Annual Percentage Rate is an encapsulation of interest rate and fee that associates with the loan. It is a decisive factor in the total cost. High APR means higher rate quotes and bigger loan instalments. This means the total amount due on you is sure to increase. To prevent this situation, try to find the loan and lender with the lowest APR. If you take the first step with caution, the rest of the journey of loan procedure and repayments goes smooth. Do a deep research of the loan market, it is not a rocket science, in a short time you can search the abundance of options. Use the loan calculator of the lenders and know the approximate rate quote and monthly instalment.
Note – APR on the website of the lender may not be applicable on the loan amount you want to borrow. It may apply to the lower or bigger amount than the one you want to take. Make sure that you get to know the exact APR from the lender before you apply.
2. Taking Less Amount
Another indirect way to lessen the total cost of the loan is to borrow less. Your savings, extra earnings, whatever you can gather in the name of funds, do it. More you arrange money on your own, lesser is the amount of loan. This is sure to reduce the size of obligation and in turn, the total cost of the loan. If the need is predictable you can start saving for the purpose and take off the burden of risk of a high cost loan. It is the simple mathematics – borrow less pay less.
3. Good Credit Rating
Oh, of course, everyone knows the importance of credit ratings in the loan market. This is the first point of attention and attraction for the lenders. They cannot avoid this aspect. If your credit rating is good then the loan companies are always ready to consider your name for the relaxation of rates. Lower rates means affordable loan deal and in turn lower total cost.
4. Stay Away from Unfair Hidden Fee and Upfront Fee
Sometimes you get in the trap of few lending practices that are ethically wrong. For instance, some lenders take upfront fee and hidden fee. These expenses increase the total cost of the loan. Make sure that you do not choose such lenders. Your hard-earned money should be used for some good purpose. It is very important to find fair deals and save money.
5. Applying to One Lender at a Time
This may sound an irrelevant way but it is important in every sense. Sometimes in the hurry to get funds you apply to many lenders at the same time. This leaves many search footprints of credit checks on your credit record. The lender that wants to approve your loan may take you as credit hungry applicant and that does not sound like a safe bet for the lenders. In that case, any lender that accepts your loan application may offer you a high rate. This can increase the total cost of the loan. At a time apply to only one lender and do not make multiple applications. Remember, greed and careless decisions are the big enemies and can spoil your financial stability.
The loans without guarantor are always important for the last minute needs but they may have a little high cost. With some ways, you can bring down the total cost of the loan. Implement them and get a solution of the high cost of the loan. The escape windows are available and are applicable according to the individual situation. You need to make sure what exactly suits you best and how it can work best in your condition. Apply for the loan only after a proper research and with a keen eye on all the related aspects. Finances are fragile and they need the attitude of ‘handle with care’. Give best of your money management skills and overcome the financial issues smoothly.