How to choose an online loan without overpaying

A short guide to comparing loans and making an informed decision.

1. Check who is offering the loan

Look up the lender's legal name, contact details and published terms. If it says it is registered with a regulator, check that information with the official source.

2. Compare the total cost

Do not look only at the instalment or the advertised rate. Add up interest, fees, insurance and any other charges to see how much you will pay in total.

3. Work out what you can afford

Before you apply, compare the repayments with your usual income and expenses. Choose an amount and a term you can repay without missing essential bills.

4. Read the late payment terms

Check what happens if you pay after the due date: there may be extra charges and other consequences set out in the agreement.

5. Review the agreement before you accept it

Confirm the amount you will receive, the repayment schedule, the total cost and the terms for early settlement. Keep a copy of the agreement.

6. Avoid paying one debt with another

A new loan can increase what you owe. If you are struggling to repay, contact the lender and ask about the options available.