You unsecured loan will be subject to an interest rate, which is known as the Annual Percentage Rate (APR).
If you are looking for a low cost loan, then comparing the APR is advisable, so you can be sure that you are getting the best deal. Lenders do quote interest rates in different ways, and it's worth familiarising yourself with these before you start:
Although the APR is often a leading factor that contributes to a ‘cheap’ loan, you should always pay attention to the small print as any additional costs will be found here.
Some lenders will apply an early settlement charge (also known as a redemption penalty) if the loan is repaid in full before the agreed end date. This can be up to 2 months interest so it pays to check this out before you commit. If you plan to repay the debt early, then it might be better for you to get a loan with a slightly higher APR but with no early settlement costs.
Other factors to consider include the flexibility of your loan during the repayment term, such as if you are allowed to make lump-sum payments, payment break or a deferred repayment, where you take a break at the start of your loan. Interest will continue to accrue on the outstanding balance and this may result in increased monthly payments so your debt is still repaid over the term agreed at the outset.
If you have a poor credit rating, have changed addresses frequently, have no previous credit history or are self-employed then is is likely that you will be offered a higher APR rate.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERM OF DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
For mortgages and re-mortgages the overall cost for comparison is 8.5% APR variable and for secured loans 14.5% APR variable. The actual rate will depend upon your circumstances. Ask for a personalised illustration. A broker fee may be payable on completion, and will depend on your circumstances. For mortgages and re-mortgages this fee is typically between 0% and 3% of the gross mortgage amount, subject to a minimum of £2,495 and a maximum of £3,995. For secured loans, the fee is typically between 0% and 10% of the loan value.
RefusedALoan.co.uk is a trading name of Ask Finance Ltd, which is registered in England and Wales (company number 4229724), Jackson House, Sibson Rd, Sale, Manchester, M33 7RR. Ask Finance is licensed under the 1974 consumer credit act to carry on the business of consumer credit, consumer brokerage, debt adjusting and debt counselling. Consumer Credit License No: 507130. Ask Finance is authorised and regulated by the Financial Services Authority (FSA) - FSA No: 300490 - for the provision of mortgage advice and arranging insurance.