Bank versus friend for loan?
Thursday, May 29th, 2008Getting a loan is a relatively easy process as long as you have a good credit history and in regular employment. The main thing to check when applying for a loan is interest rates, as they can vary widely from bank to bank. Comparison sites on the web are usually the best way of checking out the best deal, visit sites like Money Saving Expert or Money Supermarket, or just run a search.
The term of the loan is also a main consideration, how long can you afford to make payments for, what is the loan for? If it’s for a car then make sure the term is for no longer than you expect to keep the car. You don’t want to be left in a situation where ton change your car you have to have to take out another loan.
Borrowing from a friend can make life easy as they may not charge you interest, but it could be a good way to dissolve a good friendship. What would happen if you lost your job, couldn’t pay or they desperately needed the money back, how would you feel?
Another important thing to think about is, do you really need another loan? If you’re in serious debt, it might be better for you to seek debt help and consider debt solutions like an IVA or debt management rather than taking out another loan to pay off your existing debt.
If you do need to get a loan, I would say banks are the best option but do your research, that is unless your best friend has won the lottery!