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Low Interest Rate Does Not Always Mean Cheap Loans
Summary: Cheap loans are a reality and not a myth. However, a low interest rate in itself does not mean that the loan is cheap because there may be many other costs involved apart from the interest rate.
The general perception is that a loan that involves low rate of interest is beneficial. This, however, does not hold true in every case. Sometimes, manipulative lenders offer you very low interest rate but they raise the total cost of borrowing by charging loan arrangement fee and early repayment penalty. In this way, a consumer who is not aware of these things may think that he has got a good loan deal from the lender whereas the reality is very far away.
There is a concept of annual percentage rate or APR that has been specially introduced to counter the manipulative tactics adopted by some lenders. APR helps borrowers to compare different loans on an equitable basis. APR is the total cost of availing credit that a borrower has to pay to the lender, expressed in simple annual percentage. APR includes interest rate and all other costs and fees relating to a loan.
Since all the loans are expressed in terms of an APR, a standard practise in the UK loan industry, the loans have become comparable on equitable basis. Any borrower who wants to take a loan should compare it on the basis of APR, the best available measure of finding out cheap loans.
The low rate loans available with the banks and other financial institutions may require you to fulfill some conditions. The banks may ask you to provide a loan guarantee by placing your home as a security. This requirement becomes indispensable for the lenders when you want a large amount of loan, say £100,000. Lenders want to ensure that the loan that they are advancing to the consumer is backed by a concrete security. If you are ready to oblige a lender by giving your home as security, you can easily get low rate loans. In such a situation, the lender may also overlook any other shortcoming that you possess like a not so good credit rating.
In a bid to take cheap loans, you should not forget the real purpose for which you are taking a loan. It is very important that the loan fulfills your entire financial requirement and the ultimate purpose, whatever it may be. If you are confronting a situation where two loan offers are available, one slightly expensive than the other, then you should decide on the basis of collateral benefits that you are likely to derive out of two offers. The interest rate becomes unimportant in such a scenario.
Payday loans – A blessing for salaried employees
For quick debt help requirement payday loans are ideal solution you can ever have. It can be too difficult to meet outlays of advance life and it is a very workable solution to deal with.
The requirements of people in UK have taken a swift turn with the improvement of technology in life. Satisfying all the requirements with the existing income do not always serve the purpose. So, one must have hard cash to accomplish urgent necessities . Payday loans have therefore became a necessity for individual where they feel short of money. Its fame has arrived the sky due to its approval to poor and good credit person, both. These reasons have enabled this loan segment to be sanctioned with complete gratification.
The list of requirement can be too long which my demand lump sum money to fulfil. One can consume the borrowed money to remit school fees, medical fees, repair car or home, purchasing home gadgets and many other purposes. So that, every classification of individual can avail this loan anytime, payday loans has been introduced as unsecured loan.
The most remarkable feature of the payday loans is its accessibility to any borrower, irrespective of their credit record. Besides that, no collaterals are necessary for the sanctioning of the loan. At the time of acquiring this loan, there is no need of time wasting documentation and faxing the papers.
This loan has a usual eligibility criteria which is suitable to most of people and for this your age should not more than than 18 years and you should must own citizenship certificate of UK. Having a saving bank account and permanent source of monthly income is s must for taking up this loan. It is necessary for the applicant to meet the above condition so as to get the loan amount. Along with comfortable application procedure, you have the benefit that there may not be the requirement of debit card to acquire the loan.
Payday loans are exist with a slightly higher interest rate as compared to other kind of loan. The reason of being this loan more high priced is the risk feature associated with debt providers because of being unsecured in nature. A deep search can lead a individual towards the wanted out come. As the lent money is paid back within brief period, it is also renowned as ‘short term loan’. The borrower should repay the loan amount with APR on the right time fixed by the lender. It provide the cash to use until your next payday.