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Weighing Up the Options for a Cheap Personal Loan

The general financial situation may have changed rather drastically over the past few years but there are still times when we have to spend money, and when we don’t have what we need a loan can be the best or sometimes the only option available to us.

When we are looking for a cheap personal loan it is natural that we would attach a great deal of importance to the amount of interest that a potential lender would charge us. For a customer with a good credit history, especially one who was seeking a loan secured on property, this interest - or the APR (Annual Percentage Rate) to call it by its name – would be unlikely to vary a great deal between one mainstream lender and the next.

However there are a whole number of other considerations that need to be factored in when considering which lender to approach.

The APR can sometimes in fact mask a multitude of sins. Some lenders will ask for a set-up fee just to progress your cheap personal loan. Many will make a charge for early settlement and these charges can vary wildly between lenders, so if there is any possibility

whatsoever of an early settlement being made it pays to take some time out to read the small print and find out just how easy it will be to terminate the agreement before it has run its full course.

If your cheap personal loan is to be unsecured the APR is likely to be considerably higher than it would otherwise have been. This is especially the case where your credit history is bad or indifferent. The lender will be taking more of a risk by granting your loan request and you will in effect be paying a kind of “insurance” on behalf of those borrowers who are in a similar position and who will default on payments. In the case of unsecured cheap personal loans the APR quoted by different lenders will vary to a substantially greater degree than will be the case where the loan is to be secured.

At the extreme end of the market some lenders will ask for quite ludicrous amounts of interest through one means or another in the knowledge that the customer is desperate. Lenders such as this should be avoided at all cost.

A truly cheap personal loan therefore is one with a low ABV, low or preferably no set up fees, no prohibitive charges for early settlement and no hidden horrors contained in the small print.

These are factors which should all be weighed up against one another before asking for a cheap personal loan. It is a big commitment and one that should be considered very carefully beforehand. Compare cheap personal loans using the above companies and websites.

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