Loan catalogue for Latvia and Europe

How to choose a loan and avoid overpaying

People need loans for many reasons: a broken appliance or car, money for medical treatment, repairs or studies, and sometimes bigger goals such as buying a home or a car or starting a business. Each goal suits a different type of loan: fast and short-term loans for small urgent expenses, consumer loans for larger purchases and mortgages for housing. You can read more about how they differ in our article on lending types. Compare offers not by the advertised rate but by the total cost of credit and the annual percentage rate (APR), which include all interest and mandatory fees. Look at offers from several lenders — the cost of the same loan can differ noticeably. Borrow only the amount you need and choose the term carefully: a longer term means a smaller monthly payment but a higher total cost. Work out the monthly payment in the loan calculator and make sure it fits comfortably into your budget. Some lenders offer new customers a first loan with no interest — such promotions have limits on amount and term, so check in advance how much the next loan will cost. Find out whether you can repay the loan early and what it costs: this saves interest if the money becomes available sooner. Make sure the lender is licensed to provide credit, and never pay a fee “for approval” before you receive the money. Extending the repayment term is almost always paid, and late payment leads to penalties, a damaged credit history and even court enforcement. Before borrowing, think about whether you can manage without a loan, and read the contract carefully. More information is in the article “Consumer loans”.