How to choose the best loan for you
Their are many factors to take into consideration when applying for a loan. The APR or Annual Percentage Rate is a good place to start when comparing any loan plan. The APR figure lets the consumer know the amount of interest added to the loan per annum, however different plans calculate APR in varying different ways.
If the deciding factor on whether or not you accept a particular plan is based on monthly affordability you should always ask for a personalised illustration of the loan. A personal illustration will provide you with accurate figures as to the amount repayable each month and the total amount repayable at the end of the loan plan.
Two other factors to bear in mind are typical APR and set APR. By law, if a lender or broker promotes a typical APR this figure must reflect two thirds of all accepted plans offered by either the broker or lender, as a percentage this equates to 66% of all completed loans. A set APR means that all customers will be eligible for that rate. By definition the best loan plans are usually dictated by the typical rate, but you must be aware that the typical is circumstantial.
In summary, you should always obtain a personal illustration of the loan before committing to the plan. Use the monthly repayment figure and total amount repayable to you as a deciding factor.
