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Choosing A Personal Loan Can Be Harder Than You Think

$1.2trillion.

According to the Sydney Morning Herald, this staggering figure is the total consumer credit lending to individuals in Australia at the end of December 2009.

William Shakespeare told us in Hamlet that 'borrowing dulls the edge of husbandry'. Despite this warning four hundred years ago, Australia has become a nation of borrowers. Every man, woman and child in Australia owes, on average, $56, 000.

If you are looking for a personal loan, you may be wondering where to start. With many options available, choosing a personal loan can be a minefield. That's why we've come up with these five great tips to help you choose the loan that is right for you.

Do you actually need a loan?

This is the first question that you should ask yourself.

Have you fully considered all the options open to you? Do you have savings or other cash you can use instead of a loan? Are there savings you can make on a monthly basis to afford the items you want?

If the loan is to buy something, you should consider whether it would be better to delay the purchase until you have saved more money to put towards it.

Check your credit rating

Almost all personal loan lenders will use credit scoring to determine if they will agree your loan application. A loan company is likely to check your credit file to establish how you have managed credit in the past.

The healthier your credit file, the more likely it is that you will be offered the best loan rates. It is therefore worth obtaining your credit file to make sure all the information on your file is correct and up to date.

Check the comparison rate

The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. Many 'best buy' tables rank loans by their comparison rate and so it is a useful way of comparing one loan to another.

Fixed or variable?

As with many other financial products, personal loan rates are available on a fixed or variable rate basis. You might prefer the security of knowing exactly what your repayments will be with a fixed rate, or you may wish to take advantage of the flexibility of a variable rate loan.

Loyalty Can Pay

A fast-growing trend amongst financial institutions in Australia is to offer preferential loan rates to existing customers. More and more banks and other lenders are offering great loan rates - but only to their bank account, credit card or savings customers.

If your bank doesn't offer you such a rate, you need to make a decision on whether it is worth switching bank accounts in order to access to a great personal loan rate with another provider.

Aaron Zaias recommends you visit Credit Card for more free information, advice and tips on how to select the best Credit Card Rewards currently available.

BANKING CRISIS ! = Here's a better solution; why doesn't the Government simply become a bank themselves?
Think about it for a minute: Instead of taxpayer money going to make the CEOs of large banks even richer by buying their bad mortgages, why not just open up mini federal branch banks in regional post offices and tax offices? Yes, the interest rates on such emergency loans to individuals will have to be much higher than most people would like, but its a heck of a lot cheaper for the taxpayers to do this than to risk about $5 Trillion buying all that garbage that the banks have and want to unload. So what do you think of this idea? Spend $700 million, rolled over about 8 or 10 times for a grand total of about $5 Trillion, and still have nothing to show for it, or simply spend about $200 million and lend the people their own money, just at a slightly higher interest rate. The government is trying to make point that if Trillions of dollars is not given to the banks, then the banks will freeze and lending to individuals and businesses will also freeze. So my idea is why not just use this massive amount of money to lend to the people, instead of giving to the Wealthy banks? Its your money everybody! You better think about what your government is about to do to you and your grandchildren and how it will affect them for the next 300 years. The whole idea here is that the Government would do this only as long as there are no other private companies willing to do the same. In order to make it easier for private companies come back into the market, the government must charge much higher rates that what private companies would charge. This would assure that even if American banks cannot lend, then there would be foreign banks coming to the rescue of the consumers. The Government just steps in to help un-freeze the lending markets, just for a few weeks, that's all. Thats why we don't need permanent buildings and temporary sites in Post offices would be good enough for 8 to 24 weeks. The government does not want to get into the business of lending, they just want to keep the wheels of industry greased with available credit. I just discovered how the Swedish people solved a very similar problem: go to this site and see for yourself. http://www.nytimes.com/2008/09/23/business/worldbusiness/23krona.html?em My suggestions is this: Do it the same was as they did, as they have the experinence.

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