| About
Interest Rates
There are various types of loan,
different terms, many lending rates, many lenders
and many lending criteria. Add all these items
together and you arrive at a complex market place.
You are therefore well advised to check each loan
offer out very carefully and to obtain more than
one loan offer. It is important that you obtain
the loan which is most suitable for your needs
at a reasonable cost.
To start you on your way here are
some simple generic guide lines.
APR stands for Annual Percentage Rate
and refers to the annualised interest rate charged
by the lender to you for borrowing the money.
This is a good starting point to compare one loan
with another.
When considering APR try to compare
like for like loans. Lenders charge a higher APR
for very small loan amounts and a lower APR for
larger loans. Lenders generally are willing to
charge a lower APR for loans that are over a longer
period. So if you are looking at two different
lenders try to compare loans of similar amount
and similar time period.
APR should not be your only consideration.
Think of the specific reasons why you want the
loan and the types of terms and conditions that
you need to be in the loan agreement. Then create
a list of questions and either read through the
loan agreement to check that it matches your needs
or ask the lender to explain it to you. All reputable
lenders should be willing to explain whether or
not their loan will meet your needs.
For example it may be important to
you that you are able to pay the loan off early
if you want to. You will want to know if the loan
agreement allows this, and if the lender will
charge you any penalty for doing so.
You may want to take out the
loan for a long period of time, but be concerned
in case over that period you have to ride out
a financial storm. Some loan agreements allow
a repayment holiday of a few months so that borrowers
can get through a rough patch.
Equally you want to consider loan
protection insurance to help shoulder some of
this risk. If that is the case, then again shop
around, as there are good savings to be made in
this field. A reputable lender should not insist
that you take out their loan protection insurance.
They should be supportive that you make the financial
choice which is best for you, even if that means
not going with their loan protection insurance.
You may want a loan that you can have
now, but do not want to start repayments until
later. This may be because the loan is to finance
training for a career and you will be learning
rather than working for the next year. If this
is what you need then there are specialised loans
out there for you, subject of course to the lenders
lending criteria.
You may want the loan for a specific
purpose such as purchasing a car, home improvements,
to release equity built up in your home. In these
cases you may prefer to look towards a lender
who specialises in this area.
You may have already tried to obtain
a loan before and have been rejected because of
an adverse credit rating. If this is the case
you will probably be advised to select a lender
who has a more friendly approach to those with
an adverse credit rating, and by doing so increase
your chance of acceptance.
With so many loans in the market place,
there is plenty of choice available. Use this
freedom of choice as a weapon in your armoury
to get yourself the very best deal. |
