Find the Cheapest Secured Loans Online
Many financial advisers will tell you to compare the APR of two loans when you're looking for the cheapest secured loans. More and more, though, experts are suggesting that APR is flawed, and the best way to find the cheapest secured loans is to compare loans by total cost. When you can compare the actual total cost of a loan against their advertised 'headline rate', it's easy to see which loans are really the cheapest secured loans. Among the things that can add to the cost of the loan - but not show up in the advertised APR are:
- Any fees and loan costs that are not charged at the beginning of the loan
The APR (Annual Percentage Rate) is calculated using only the amount of the entire loan and any fees that are paid at the beginning of the loan period. Any fees that are due after the loan is made aren't used in calculating the APR, which could make it artificially low.
- Payment Protection Insurance that is charged separately from the loan
Many lenders automatically include the cost of PPI in their quote of a monthly payment. Ask if the amount you're being quoted for low cost secured loans includes PPI or not, and request a quote both with and without. You are not required to take PPI from the lender. If you feel that you need it, you can acquire insurance at much lower cost by shopping around.
- Redemption or early repayment fees
About 70% of those who take out loans end up paying them off early. The law allows lenders to charge up to two full months interest as a redemption fee - but two months may be MORE than two months under some circumstances. The Rule of 78 - a way of assigning interest costs over the course of the loan that makes the interest charges greater up front - can add greatly to the cost of two months interest.
- The way that interest rates are calculated
Whether interest rates are calculated daily or monthly can make a big difference in the overall cost of a loan. If you're not certain how interest will be calculated on your loan, ask. Interest calculated on a daily basis can save you a surprising amount of money.
- Interest charges that accrue during sanctioned 'payment holidays and other bells and whistles
Ah, payment holidays! What a blessing at holiday time to be able to put off a month's payment on your loan and use the money for your own pleasure. What a wonderful way for lenders to rack up an extra month's interest for every year that the loan runs. If you've taken out a 10 year secured loan, and take advantage of a payment holiday every year, you'll pay nearly a full year's extra interest on the loan. No one says not to take those holidays - but do be aware of the added cost.
If you're on the lookout for the cheapest secured loans available, it pays to do your shopping online. A website like moneyeverything.com gives you all the information that you need to make informed choices about your finances - and the more information you have, the wiser your choices will be.