For the most part, the actual loan rate (APR) that you might be offered by lenders will not vary all that greatly. As there is a lot of fierce competition between lenders who are on the lookout for your business, they are all only too aware that the APR is probably the most important factor in terms of their advertising and marketing strategy when it comes to potentially ‘luring’ a customer in to check out their finance packages so you’ll not find too much difference between them all, although they will vary to a degree.
However, whilst interest rates might not differ all that much, the lenders’ fees can vary tremendously and these can often be ‘buried’ deep within the terms and conditions of any loan agreement so it’s important that you are aware of these additional costs and are extremely vigilant in asking all the right questions when you are approaching any lender to ask for money. There can be early settlement charges, payment protection insurance and other arrangement fees which might make one loan quote far more expensive than another, even though the APR, at first glance, seemed to indicate that the two lenders would be able to offer you virtually identical quotes.
Most reputable lenders will explain any additional costs in plain English but before you sign on the dotted line, you should ensure that all additional costs are set down in writing along with the total cost of the loan at the close before you agree to take it out. Make sure you question any charges you don’t understand and ask them to also be included in any written proposal and presented in plain English. Some lenders can even be prepared to waive the fees for you in certain cases.
Certain lenders have also started to specialise in certain types of borrowers so if, for example, you have a bad credit rating, you might just find that you can get a cheaper deal by taking out a loan with one of the lenders who specialise in finding the right deal for people with a poor credit history.
The key here is to take your time and do your homework first. Don’t be rushed into signing any agreement until you’re sure that what’s contained on the ‘bottom line’ of any loan proposal offers you the cheapest deal around and one which is tailored to suit your own individual needs and circumstances. Review loans thoroughly and if you’re still not certain, an independent finance broker will offer you free advice and will often be able to find the right deal for you at the cheapest cost.