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Posts Tagged ‘APR’

There is a cut-throat competition between the banks, building societies and other lending institutions to provide personal loans as these loans bring big money to them. They get their money through the interest they charge on the loan borrowed by the borrowers, no matter it is through a bank overdraft, credit card or mortgage.

The rate of interest applied on the loan is called as APR i.e. the Annual Percentage Rate. APRs are the first consideration of the borrowers when they are arranging a loan for them. Comparing the APRs of different products determines the competitiveness they have. If it is presented as a monthly interest rate, try to find out its annual equivalent that allows you its comparison with other lenders.

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Interest rates are available in a wide range and you will not gain anything by making payment for more than the necessary.

So, avoid thinking that if your own bank or the lender providing you a special offer then it will be the best for you. No body can stop you from going elsewhere; you are free to shop around to find best deal.

While looking at the interest rates, you should also consider some other important factors that can make the loan cheaper for you. For example, rate of interest will be lower if you take a secured loan; however, it includes a higher risk as you could lose your collateral while making default payments.

Some lenders offer different APRs depending upon the application method i.e. higher APR may be allowed to the applicants applied through telephone as compared to the applicants applied through Internet. So, shipping around may prove a worthy deal for you.

While searching for a low cost cash loans, you should always start with comparing the APRs. Interest rates are quoted by the lenders in different ways and if you get familiarized with all these before starting, it would be better for you.

If your loan comprises of flexibility, then on the basis of rolling you can also become able for the withdrawal of the funds from the account. This will let you have funds being within your limit of credit.

Payment breaks or repayment holidays are also offered by the lenders. This way, you can skip a month from repaying the instalment. Either it is allowed at the beginning of the month, called as deferred repayment or at an agreed time during the loan repayment term.

Interest accrual will be continued on the outstanding balance and this might be resulting in escalated monthly payments. So, your debt still gets repaid within the time agreed at the beginning.

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