4 Money-Saving Loan Hacks Borrowers Should Know

We all know that borrowing money means paying out more in the long-term. No matter which way you try and frame it, it’s how the system works. To get a loan, you have to be willing to pay interest to the lender, no ifs and no buts. Still, accepting the costs as inevitable isn’t the right attitude. Yes, there will be some expenses which you won’t be able to cut completely, yet the amount is up for debate. That’s right; you reduce them with the right tricks and tips. Of course, to do that you need to know the hacks that can make it happen. Here are four.

The definition of a hard search is when applicants apply for multiple loans at once. Every time you send in a form, online or in the shop, the lender checks your credit score for information. If they decide to reject the application, it stays on the score and leaves a mark. Once one has rejected the proposal, the others will follow suit and the cycle will continue. Soft searching, by comparison, is the art of applying for one at a time so that the effect is lessened. Always leave a large chunk of time in between.

Businesses usually want credit, which is why they opt for credit cards. A piece of plastic is a potential savior yet it isn’t infallible. In fact, plenty of companies have fallen foul of repayment rules and lost everything. Still, they are common and easy to understand and that makes them popular. This logic has its benefits in some ways yet is flawed in others. For example, cash-in-hand can be better than credit. Therefore, business line of credit is a resource worth checking out, particularly because the APR is low. A credit union is another tool which provides low-interest loans, but only small ones.

As reckless as it seems, it is a sure-fire way to save money if the numbers are right. Clearscore.com has a great example which is well worth taking a look at. If you borrow £7,450 at 4.5%, you pay £7,967 over the course of three years. By adding an extra £50 onto the balance, the total comes to £7,893 over the same period. So, even though the second loan amount is more, it’s the one which cuts the costs. The only way to bag these anomalies is to research the time frame and the interest rate for different sums.

Finally, always look for deals that offer a back exit in case things begin to get too real. Take a credit card as an example. The 0% interest rate is up and the price of payment has jumped to the industry standard 19%. Wow, that’s a lot of cash to pay back every month. Thankfully, you don’t have to if there is another card which has a lower rate. Simply transfer the balance for a small fee and continue the merry-go-round. Although it isn’t a long-term solution, it should hold you steady for now.

Are there any you can or would like to add to the list?