By : George McGonigal
In short the lower the annual percentage rate (APR) the better. However the amount of interest you pay on a loan depends on your credit rating.
If you have a good rating then you are a safer bet for the loan company and can therefore enjoy a lower interest rate. It’s also worth noting that the rates you see advertised are often only available for people with excellent credit ratings or who borrow a specified minimum amount.
Another common mistake is comparing loans based on interest rates. The interest rate on its own does not give the full picture as it doesn’t include all charges.
However help is at hand in the form of the annual percentage rate or APR, which is a calculation that allows consumers to benchmark and compare the cost of borrowing.
APR takes into account both the interest rate you pay and any other fees charged by the loan provider. It also looks at when and how often interest and charges must be paid. So make sure you compare APR’s when shopping around for the best deal and not the advertised interest rate.
George McGonigal
George is webmaster of an online personal loan resourcs website for UK borrowers. We bring under one roof lenders who offer online quotations to allow our visitors to compare rates in the comfort of their own homes. Why not visit us at UK Personal Loans Online: or our definitions page at Terminology Explained or our Useful Links Page.
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