There are many articles out there which focus on loans and what to do before you apply. What many of these articles don’t cover, however, is how best to spend the cash once the loan has been approved and paid out. Of course, what any individual borrower does with their loan is up to them, but there are some things to keep in mind no matter what you’re spending the money on.
For many loan customers, the loan is required to fund a larger purchase. This may come about due to a desire or due to a need. Either motivation to get a loan is fine, as long as the money is spent wisely. Remember – you will have to pay back more than you borrowed due to the interest, so anything you spend this money on should be worth it. Here’s how to make the absolute most of it.
Do your research
Ideally, before you apply for a loan you should do some research to compare prices and details of what you want or need to buy. If you are after a new washing machine, for instance, it is wise to do some research into the different types, the load size, the additional features and which brands are of best quality so you know what price bracket you’re looking at.
You may find that some purchases require more research than others, depending on what it is that you’re looking to buy. Asking friends, family or forums for information on how best to go about it – especially if it’s an unusual or specialist purchase – should help you to pinpoint exactly what you need.
Where the loan is for something like house repairs or upgrades, always get a handful of different quotes before applying. Most home improvement companies are happy to survey and quote for free so this should require no initial outlay and just a little of your time.
Only borrow what you need
To ensure you are not spending more than you need to on interest, it’s best to only borrow what you need. Many online loan companies, such as us here at H&T Pawnbrokers, have an online loan calculator, so that you can adjust the amount and the payback term to suit your budget.
You should always ensure that you are able to meet the monthly payment expectations easily, whilst still allowing for some surplus cash in your budget. Lenders which are properly regulated and which follow fair lending practices may ask you a few questions about your income and regular expenses as part of the application process. This is to ensure that the loan is a good fit for you and that the chance of falling into arrears is as low as possible.
Look for special offers
When the time comes to buy what you need, it’s always wise to do a final check for any special offers or vouchers which could help to bring the cost down even more. Free reward schemes may also be available, which could be worth signing up to in order to receive a certain amount off or gain a reward in the future.
Voucher codes for many different companies can be found online by performing a simple search. You may also find certain deals via cashback sites like Quidco or Topcashback. If you’re planning to buy what you need online, then doing so via a site like this can provide you with a bit of cashback at a later date which you would otherwise not get if buying direct.
If you are buying something from a private seller or from a shop which has no online presence, it may be worth asking for their best deal or trying to bring the price down a little. Bartering is considered acceptable when purchasing cars, antiques or other items from individual sellers, particularly if it is second-hand. There is no harm in asking if there can be something thrown in for free even if the price cannot be negotiated upon – it’s always worth asking!
Consider quality and longevity
When looking at buying any item, you should look at quality as a priority. While it may be tempting – particularly if you are used to keeping a close eye on your finances – to opt for the cheapest version, there may be times where spending a little more money means further savings in the future.
More expensive, quality home appliances, for example, are more likely to last longer and to work more efficiently than most very cheap options. Avoiding having to pay for another replacement for a number of years is always going to be more cost effective than having to buy a new one every year or so, no matter the appliance. This way, you’ll also produce much less waste and avoid the hassle of having to dispose of anything electrical in the proper manner. Well-constructed and efficient home appliances should also use less energy and therefore help to keep your bills stable. Consumer information sites like Which? can help you to pinpoint exactly which products are best.
In instances like these, it’s easy to see how spending a little more initially can help financially in the future. It’s important to keep this in mind both when applying for and spending your loan.
Read reviews and feedback
One of the best ways to tell if something is worth buying is to look at reviews and feedback from previous customers. This can be done via a number of websites, or through asking others in person depending on how localised the seller is. Trustpilot, for example, allows you to see reviews for a huge range of companies, all of which are written by confirmed customers. The company are not allowed to remove legitimate ‘poor’ reviews, so that an accurate representation of their offering (and how they handle the complaint) can be seen.
Even if you need to buy something in a hurry, the internet can allow you to make the most of your purchase quickly, even if that means just checking out reviews to ensure you’re well informed about what to expect. By getting a good feel for what you’re buying, you become well-informed enough to make a good decision – one which is worth the money that you have borrowed.