Loan Comparison: The Importance of Looking for the Best Loan Options

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Almost 10 years ago, I got the first of my only 2 loans: a new computer I’d pay for in 3 years (fixed rates, the laptop was purchased from a local store). Loan comparison? What’s this?

Back then my need for a new computer was indeed huge, since the one I was using couldn’t put up with how much work I had to do as a passionate new web designer. Instead of making progress and learning better, I had to deal with constant system crashes and resets, which didn’t help with my productivity and drove me crazy. That’s all I had in mind: I needed a proper computer and didn’t have the money for it.

Of course, as you can guess, my ‘shopping’ for a proper loan was pretty simple: went to the store, saw a good laptop and the payment plans. Said yes, signed the dotted line and that was it. Although reckless, I was lucky since the loan itself was a pretty good one.

loan-comparison

The only downside was that I couldn’t pay it in advance (after 6 months I had the money to pay off my debt entirely, since my new web design business was really doing well). OK, I could pay in advance (no bank will refuse your money), but I’d also have to pay a hefty commission, so I decided to pay each month as the initial plan was laid.

Armed with such a great experience and the thinking that my side business can only go better (while also having a good salary at my main job), I decided to take another loan, a ‘breeze‘: almost 10 times bigger.

Having the opportunity to work with a web site like lanemegleren.no would have been great, but back then in my country there was nothing like this. And I didn’t want to wait or think about a better loan, I wanted the car.

Let’s see how I purchased my car, it’s a great example of how NOT to ‘shop’ for a car or a loan.

In the months before taking the loan I started saving some money, since I knew there would be at least a 20% down payment for the car loan, not to mention my (now) husband was still trying to convince me to get a second-hand car, which would have been less costly.

But I had my eyes on a new Vauxhall (Opel in Europe) Corsa. It was my favourite car and I absolutely fell in love with it. I wanted a Corsa, a red or ‘beije’ one (so that my logo would look good on it), also wanted to have alloy rims and a good sound system.

I spent more time looking at the extras than trying to get a better loan option.

Purchasing the car with the dealer’s loan system meant I also had to pay an expensive premium insurance for the vehicle and my loan conditions were pretty strict too. Just doing a little ‘leg work’ and doing my own loan comparison job would have saved me at least 3000 Euro. But I was stubborn and didn’t care. So I paid at least 25% more than I’d have paid with a better plan.

If I knew back then what I know now … in the past years I became more interested in better handling my money and got shocked thinking about such a financial mistake. But there’s nothing I can do to change the past, the good thing is that I was able to pay off my debt (even if pretty painful) and now my financial decisions are better.

Did you ever work with a loan comparison tool? Did you take a loan and not ‘shop’ around, only to find out you’re paying way more than you could have?

4 COMMENTS

  1. I got my first laptop the same way, first one I saw, I bought. It was my first and (thank god) my only loan, but the experience was not good at all. It was enough for me to not want to loan money from banks ever again 😀 Losing so much money is not OK.

    • Yeah, you are losing money in most cases. With a bit of a saving effort you don’t have to deal with the hassle anymore and can use the money that’s left for something else.

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