Personal loans can be a smart way to get what you need sooner, from consolidating debt to buying a car or improving your home. But without a bit of strategy, they can also cost more than they should.
In this article, we’ll walk you through simple personal loan hacks that could help you save money and feel more confident about the steps you’ll take.
1. Know your credit score before applying
Lenders use your credit score to decide the interest rate they’ll offer you. The higher your score, the better your chances of getting a lower rate. That’s why it pays to know where you stand before applying. If your score is looking good, you’re in a stronger position to negotiate or be eligible for more competitive offers. If it’s not where you want it to be, you can hold off and take a few steps to improve it before applying. Even a small increase in your score can make a difference in how much you pay over the life of the loan.
2. Shop around and compare properly
An underrated personal loan hack? Don’t settle for the first offer that lands in your inbox. Different lenders offer different rates, loan terms and repayment options. But it’s not just about the number you see at the top. Pay attention to the comparison rate, which reflects the true cost of a loan. This includes interest and any extra charges. A lender might promote a low rate, but once you factor in fees, it could end up costing more. Always compare apples with apples.
Bonus tip: Look through the lender’s FAQs. You’ll often find helpful details about costs, timing and repayments that can give you a clearer picture when comparing options.
3. Consider a shorter loan term
It can be tempting to stretch your loan over several years to reduce your monthly repayments. But in the long run, you’ll usually pay more in interest. A shorter term means higher repayments, but less interest overall. If your budget allows, choosing a shorter loan period could be one of the easiest ways to save. Plus, it gets the loan off your plate sooner.
4. Make extra repayments when you can
If your lender allows it, making additional payments can reduce your balance faster and lower the interest you pay. Even small extra payments here and there can make a noticeable dent. If you’re using your loan for debt consolidation, this tactic can help you stay ahead and shrink what you owe sooner. Just be sure to check that your loan doesn’t have penalties for early repayment.
5. Avoid unnecessary add-ons
When you apply for a loan, you might be offered extras like loan insurance or bundled products. These can sound useful, but they often come with added costs that you might not need. Before saying yes to anything additional, ask yourself if it genuinely adds value. If not, keep it simple and stick to the loan itself. This personal loan tip is especially helpful for first-time borrowers, where it’s easy to feel pressured into taking on more than you planned.
What you see is what you get with NOW Finance
At NOW Finance, keeping your borrowing costs low isn’t something you have to figure out with a “personal loan hack”. It’s simply how we do things. There’s nothing to pay to apply, no upfront costs, no ongoing charges and no penalties for early or extra repayments. Even missed payment fees are off the table.
This approach is one of the reasons we’ve been recognised with a Mozo Experts Choice Award. Just as important, with a loan that’s fee-free from start to finish, you keep more of your money where it belongs — with you.
If you’re seeking a better deal on your personal loan, we invite you to explore your options with us.
Disclaimer: This article contains general comments and recommendations only. This article has been prepared without taking account of your objectives, financial situation or needs. Before taking any action, you should consider the appropriateness of the comments made in the article, having regard to your objectives, financial situation and needs. If this article relates to the acquisition, or possible acquisition, of a particular credit product, you should obtain and consider the relevant disclosure documents before applying for the product. The information in this article is considered to be true and correct at the date of publication; changes in circumstances after the time of publication may affect the accuracy of the information.
