Choosing the best loan

Choosing the best loan


Getting a good loan can save you thousands of dollars in fees and interest, so it is important to shop around for the best deal.

There are many considerations when choosing a loan. After you have decided on the amount you need to borrow, the features you need and the time frame to pay it back you should consider the following:

Interest rates
The interest rate is most likely the first thing you will want to know when searching for a loan. You will need to decide on whether you prefer a variable or fixed rate. If you decide on a variable rate, account for potential interest rate rises. Some lenders offer ‘honeymoon’ rates for the first 1 or 2 years of your loan where the rates are low then rise after the ‘honeymoon’ period ends. If you take this option, make sure you will be able to make repayments at the higher rates.

The comparison rate
The comparison rate is the interest rate plus all the fees and charges you will pay on the loan. Comparison rates help you work out the true cost of a loan and can assist you in comparing the cost of different loans. In addition to the comparison rate, you should compare the features of each loan, i.e., the ability to make extra repayments and so forth.

Using a broker
It may be beneficial for you to use a broker to find the most suitable loan, especially for larger loans like a mortgage. A broker will negotiate with financial institutions on your behalf. They can offer a variety of options, help select a loan and manage the process until settlement. Compare brokers and find out about their fee structures before deciding.

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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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