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Advantages and Disadvantage of Borrowing Through you Current Bank

If you are looking for a loan then the first place that you might look could be your current bank. There are some advantages to doing this but also some disadvantages and it is worth being aware of both before you make a decision as to whether you want to go with them or not.


You will be familiar with how your bank works and it is likely that you will trust them or else you would not continue to bank with them. You may also know the staff at the local branch or just be happy that there is a branch available for you to go in if you need help with anything, if you indeed have a local branch. You will also be used to how to communicate with them when you have a problem, whether this is online, by telephone or face to face.

When you take out a new financial product it can be hard work as you have to provide lots of documents as identification so that they can do all sorts of checks on you. However, if you already bank with them, this will not need to be done and so it could speed up the whole process of getting a loan for you.

It is very convenient using your current bank. You will also not have the hassle of having to compare different lenders or lenders which offer multiple products such as Omacl and work out which you think will be the best for you and try to understand more about them and the products they have. You will avoid the cost of a financial advisor if you do not understand your options as your bank will be able to help you out and explain this to you.


As there are many lenders around then it is probably that there will be one available that will be cheaper than your current bank. This means that you could be better off by using them rather than going to your bank. If you are borrowing a significant amount of money or for a sustained period of time then these savings can really add up and it is worth calculating what the difference might be. They could differ in other ways as well, perhaps providing better customer service, having a better reputation or being more flexible with regards to repayments. It is good to investigate all of these things and consider what is important to you with regards to borrowing and whether your bank can provide you with everything that you need. If you are unconfident about doing this research yourself then you may need to pay a financial advisor to help you. Although they can be pricey, you can make back more money than you are paying for them by choosing a significantly cheaper loan. This will all depend though on how much you are borrowing and how long for. With a mortgage it could be well worth it but for a short-term loan it is unlikely to make enough of a difference to be worth it.

It can be difficult stepping away from the security of a bank that you know, especially if you have used them for a long time. However, even if you take out a loan with another lender and change your mind, you may be able to do so. It can be possible to switch lenders midways through the term of a loan, by borrowing elsewhere and using the money to pay of the existing loan. You will have to check that this is an option before taking out your loan though as not all loans are this flexible or they will have high charges for repaying early.

It is therefore not worth just going with your bank and ignoring everyone else. You need to see what everyone else is offering first in order to work out which seems to be the best for you. Although it is understandable that you may want to stick with your bank, you could end up getting a better service, a product better suited to your needs and a cheaper product. It is important to think about all of these factors when you are looking for a loan.

You could just quickly use a comparison website to look at how much others are charging with regards to interest and this will be a start. You will then see how much you might be able to save (although there are other costs as well as interest to consider such as administration charges and early redemption & late repayment fees). Then you will know whether it really is worth doing a lot of work to see where you can get the best deal or whether using your bank will not cost you significantly more money. This will not take long and it is worth it as it could lead to you making significant savings.

Is it Worth Getting a Car Loan?

A car loan is something that many people take out when they get a new vehicle. There are pros and cons to taking out a loan like this and it is worth thinking about the options that you have and making a well-informed decision as to whether a loan is right for you or not.

Cost of loan

A loan can be an expensive business. Whenever we borrow money we will have to pay for it, usually in paying interest but sometimes additional fees as well. This means that it is something that we should always think about before doing. It is best to find out exactly how much the loan will cost you so that you can think about whether you think that it is worth that extra money. Remember to consider any fees as well as the interest on the loan when you are doing your calculations. You may have to pay administration charges for setting up the loan as well as other charges if you are late with repayments, want to pay the loan off early or things like this. It is worth being aware of all of the costs of the loan, both the ones that you will definitely have to pay as well as those that you might.

Stress of owing money

When you have a loan you will normally have to make regular repayments. These tend to be an amount each month and they could potentially last for ten years if you are borrowing a lot of money. Knowing that you have to find that money each month can be difficult. It is really important to therefore find out how much it will be and make sure that you will be able to afford those repayments. If you normally struggle financially then you will need to come up with a plan on how you are going to be able to manage these repayments. It might be that you will be able to cut back elsewhere or that you can find a way to earn some extra money to pay for it. Whatever you plan on doing you need to make sure that you commit to doing it for the full term of the loan and that you are prepared for any increases in repayments due to possible interest rate increases.

Improved car buying options

Of course if you have very limit finances then you will be very limited in your choice of vehicle if you do not borrow money. It could be a false economy if you buy a really cheap vehicle that ends up needing lots of repairs or even breaking down completely before you are able to get any value for money. You may also need a large vehicle or something reliable to get to work and back each day. Although borrowing money will mean you end up paying out more it could be well worth it if you can buy something that does not break down often and allows you to keep your job.

Loan alternatives

It is wise though to see whether you do have any alternatives to a loan before you take one out. For example, you might have some savings that you can use. With savings you may worry that you want to keep them so that you have some money to fall back on. Although this is wise, needing a new car could be the situation that you are waiting for to spend it. If you do need extra once it is spent, then you could borrow but it could be that you will not need to and you can avoid a loan and the associated costs. Then instead of making loan repayments each month you can replenish your savings account instead.

Another alternative might be to wait until you can save up the money. This will certainly be cheaper but you may not have a choice. If you need a new car immediately due to not having one that is situatable for driving then you will have to buy one. However, if you have one that is adequate but you just would really like a new one, then it could be better to save up for it rather than taking the loan and you will save a lot of money.

So whether you should have a car loan will very much depend on your circumstances. If you can manage without one then this will be cheaper for you but if you otherwise cannot have a car or cannot have a reliable car then it could be better to borrow the money. Obviously if you do decide to get a loan make sure that you compare the cost of loans across different lenders so that you are sure that you are getting the best deal for you. Costs are important and you will find that some lenders are cheaper than others. Otherwise you could end up paying more than necessary, but do also compare other things such as the reputation of the lender and how good the customer services is to make sure that you get good value for money.