How To Use Comparison Sites Effectively
For many people looking for financial products, savings accounts and car insurance, comparison sites are now typically the first port of call. The main advantage is that you can see a number of products in one place and make the best decision based on your requirements, rather than settling for just one company’s product.
Further benefits include special offers or discounts for some products and even sign up bonuses such as nectar points and cashback. For guarantor loans, a comparison website allows you to pinpoint exactly which lender can help you find the amount you wish to borrow, how long for and the best rate. George Banco proudly features on Guarantor Loan Comparison, an FCA regulated comparison site and today, we explain how to use comparison websites effectively.
Use more than one comparison website
To truly get an overview of an industry such as guarantor loans, it is advisable to look at more than one comparison website.
Some comparison websites may only show preferred providers which they have commercial agreements with and may not include all the companies in the industry. Checking more than one comparison site will allow you to truly see all the lenders in the industry.
Where possible, use calculators and eligibility tools in order to get the best idea of the rates charged and to narrow down the lenders to your requirements i.e borrowing £3,000 over 24 months.
An eligibility tool provided by some comparisons can allow you to see which lender you are the best fit for, without charging any fees or leaving a search footprint and without damaging your credit rating.
How comparison sites make their money
Be aware of how the comparison websites make their money and this is commonly through funding a loan or a customer taking out an insurance policy. Therefore, if they have comparison tables, these might be positioned in a way that is commercially favourable.
With this in mind, the lender or insurer at the top of the list may not necessary be the best one for you, instead it might be the one that is paying the comparison site the most. On the other hand, if you came to the site looking for a loan, those sites at the top are probably more likely to fund applications because they have invested in a higher position or commission to the comparison website.
The ways that comparison websites make money
Cost per clicks
This is the commission that will be received by the comparison site each time a customer clicks on a listing, quite similar to the way Google Ads work. The lender or insurer will typically put aside a budget each month towards their click volumes and once this runs out, the next company pops up. In most cases, the higher commissions are reserved for higher positions on the table – so be aware of this.
You can expect companies to be featured in a section reserved for advertising or highlighted in a different colour so that it stands out. This is a product clearly recommended by the lender to encourage more traffic and the broker is likely to receive better commissions as a result.
A fee is agreed upon for a specific period of time such as a week, month or a year and the provider will receive a fixed position on the comparison table. This is a way to drive consistent traffic to their website and for the comparison company to receive a steady income.
Be careful with the details that you enter
Do not be alarmed if a comparison website asks you to enter your personal details. This is so that they can filter the results which come up so that they are best suited to your wants and needs.
However, do not fall into any traps. If at any point you are asked for your bank details, this may indicate that there is an upfront fee or they are looking to pass you onto a number of lenders. Alternatively, they may simply want to run a credit check which can leave a mark on your credit search history – potentially impacting your credit score if they say they carry out a hard credit search.
Some other options are using companies like Money.co.uk and Guarantor Loan Comparison where they simply list the providers they work with, allowing you to compare and making decision before clicking through to the website of your chosen company. This means that you do not risk giving away any personal details or them being forwarded to numerous partners and if fact, you have a lot more control.