What happens if your choice of loan is limited? What do you do if you’re not a student, have no intention of commencing vocational training so the career development loan is not open to you? If you don’t own a home, so can’t get a mortgage, you’ll not have anything that you can seriously use as collateral against a secured loan. Mortgages and secured loans are cheaper than unsecured personal loans, but if the above applies to you, unsecured personal loans are your only option. But how do you find the lowest interest rate?

Many people start by walking down their local high street. You’ll see advertisements for loans in building societies and banks. You’ll also see that they will happily trumpet the fact that their loans are at low rates. This is because they are comparing themselves to each other, rather than the whole market, and know that if you are comparing only high street financial organizations then they don’t need to offer the lowest interest rate to get your business. You will also find that the low rate that they quote can only be found if you borrow very high amounts over very long periods, and have a perfect credit record, so look at the small print.

There are loan providers who do not have a high street presence. This is similar to the credit card market. Look out for adverts or communications on the radio, TV or on billboards, or even sent to you by post. Don’t be fooled by the presentation, though, check the amounts you can borrow, the periods you can borrow over, and APRs for comparable products. Since information is dispersed, you may find it difficult to compare products from different providers.

The print media, such as magazines and newspapers, do allow you to compare loan rates, in that they will often publish ‘best-buy’ tables, which are usually quite clear in the information they convey, especially as the rates are all based on the same products, in terms of amounts and terms. However, the data isn’t dynamic, so you can’t make sure it’s definitely the best product for you.

This is why the internet is seen as an advantageous step for consumers. Personal finance websites normally contain comparison services, otherwise called search and select applications. You can enter the exact amount that you wish to borrow, and the period over which you wish to pay it back over. You may also be asked for other details, in order to present you with a list of the best loans for your own personal circumstances. You can sort the loans by interest rates and in most cases apply online. You should also get an indication of the likelihood that you’ll be approved.