by John Gray

Created on: August 20, 2007   Last Updated: June 12, 2009

Natural common sense dictates that the best loan to get is no loan. It does not make any financial sense at all to get a loan and to consequently pay more for the same item in the long-term. Much of the trouble in which the world's financial markets and the current economic downturn has stemmed from people taking out loans in which they can't possibly pay back.

In many circumstance people feel assured that a quick loan is the easy answer for a short-term consumer need. It is not always a case of people living beyond their means but a simple desire for a luxury item or a nice holiday. Such desires are inflamed by the media bombardment that exists in our world, it is a constant paradox.

However a quick loan is not always the quick fix which people feel it can be, for one, it usually leads to the habit of taking out loans which has the effect of encouraging the individual to take out more loans in the future. It has the same effect as gambling, the desire for just one more loan is not a healthy position to be in. Now more than ever it means that no job is safe and that short loan may seem practical to pay back but can anyone really be sure that it will be? The future is ever changeable.

A way around the desire to take out a loan could be that before people think about taking out a loan, they should consider how long it would take to save that amount of money. It might be less than the individual thinks if they look on how to cut back on other items and expenses

Perhaps a more pertinent question should be do I need it in the first place? Do I need a new car when the old one works fine? It is perhaps a product of the society in which we now live in that people feel pressured into thinking they need the latest item. There is little point in an individual crippling themselves by taking out loans which they don't really need.

However if it really is an essential purchase the most important thing to look for in a loan is the APR rate, the lower the better. It is possible to secure zero percent interest rate on some loans, though this is usually direct with the store for a particular purchase, usually with a clause tied to the value of the product. The good news is with the current economic situation that consumers have more purchase power over items. It may be possible to agree terms with a sales person over interest free credit purchases, it is worth try if it is absolutely necessary. It is important to remember that a loan is still a loan even if it is at zero percent APR.

Shopping around for the best loan deals and trying to get a discounted rate is the best way to secure a low-interest loan. There are a number of consumer websites which make it possible to quickly survey the current available loans from the high street and this may be a good place to start.

Another important factor when shopping for a loan is the time it takes to pay off the loan, the fewer repays the better. This will ensure that the excess of the loan is kept to a minimum and the dept will be severed as quickly and as painlessly as possible. Mortgage repayments for example are something that many people will take out in their lifetimes but by cutting the time needed to make repayments and by putting out an initially large deposit can vastly reduce payments and the overall total cost.

To conclude a loan is not a good way to go forward as it clearly does not make financial sense. Consumer loans can be vastly reduced, by shopping around in search of a good APR rate or better still interest free rates. In reality though those who are wise and prudent will avoid a loan at all costs because they are just not worth it.

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