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Four common loan mistakes to avoid

Posted: January 4, 2018

At the end of December 2017, the financial website ABCMoney.co.uk listed four common mistakes that people make when needing a loan.

The first mistake given is not shopping around to find the best deal. You can avoid this by using a broker who has access to a wide number of lenders and can find the best offers suitable for your financial needs. The cheapest offer is not necessarily the best, as it may have terms and conditions that are not well suited.

The second most common mistake is overlooking your options. Some people think that their choices are limited to personal loans, and neglect to consider alternatives such as bridging loans. A bridging loan broker provides advice on whether alternative finance is a suitable option.

The third mistake is to continue spending too much. Many people use a loan to pay off credit card debts but then continue with the same reckless spending habits. You should budget for loan repayments and not spend more than your income. Open bridging loans can be repaid at any time within the loan period. Paying the loan early means that you save on interest charges.

The fourth mistake is failing to tell the truth on a loan application. For example, some people overstate their income. If this is found out, then it could jeopardise the loan, and prevent further loans.

The advice from ABCMoney.co.uk is to never lie when applying for a loan, and to avoid all of these common slip-ups to get the most out of your loan.