Let’s face it: pretty much the only way you can actually save money with a loan is by not taking it. Unfortunately, that’s not a real option for most of us; bad credit personal loans are expensive products simply because everybody needs them, so the lenders can afford to impose their own terms. Of course, that doesn’t mean lenders just want to rip you off; they have their own risks to cover, so you have to understand their point of view as well, in order to negotiate your deal.

Decide What You Want

The biggest money saving tip when you have to get a loan is to know exactly what you want, before walking into the bank. Most borrowers get tempted into accepting all sorts of offers and deal that sound good for the moment, but turn out to be more expensive on the long term. It’s easier to resist such temptations if you do your own research, and you’re ready to stick to your decision.

Comparing loans from different lenders feels a bit like comparing oranges to elephants: there are so many different aspects to take into account, and you need a lot of complicated equations to reduce them all to a similar level. Well, that’s not quite true you don’t need to take an accounting class in order to figure out the best options, but you’ll have to invest a few days in researching them.

Only compare loans with identical conditions; for example, do not try to compare secured and unsecured loans, or loans with a term of 10 months with those with a term of 10 years. Check the interest rate, but also the total amount to be repaid, which is based on more than just the principal and the interest, as it also includes other fees and commissions. Some banks may charge as much as $250 just to process your application, so it’s not something to be treated lightly.

Learn to Sell Yourself

When you apply for a credit, you’re basically trying to convince the lender that you’re worthy of it. Your credit score will play a big part in that, so make sure it’s in good shape. While you’re at it, also check if your chosen lender for this personal unsecured loans reports to all three major credit rating agencies. If so, the loan will improve your credit score even more as long as you keep up with the payments, of course.

A long-term employment record will also make you more interesting for the lender. If you’re already a client for the respective bank, you may get some form of loyalty compensation; but also, if you’re a new client, you may benefit from some promotional offer.

Using collateral will save you considerable amounts, as the interest rates are drastically lower on secured loans, but make sure you’re prepared to take the risk. When you take the first personal loan, it seems absurd to even consider that you may lose your home over it; after all, it’s just a small amount, and you’ll repay it quickly. But debt spirals quickly out of control, if you don’t administer it properly, and you may soon find yourself taking new loans just to cover old ones.