Question 1

How do I compare loans properly?

Accepted Answer

To compare loans effectively, look at the monthly payment, total interest paid, APR (Annual Percentage Rate), and total cost. This loan comparison calculator shows all these metrics side by side so you can easily see which UK loan offers the best value. Don't just focus on the interest rate; consider the total cost over the life of the loan to make an informed decision.

Question 2

What's the difference between APR and interest rate?

Accepted Answer

The interest rate is the cost of borrowing the principal amount. APR (Annual Percentage Rate) includes the interest rate plus other fees and costs, such as origination fees and processing fees, giving you a more complete picture of the loan's true cost. APR is generally a better metric for comparing UK loans because it accounts for all costs.

Question 3

Which loan is actually the best for me?

Accepted Answer

The 'best' loan depends on your financial situation and priorities. Our comparison tool highlights the loan with the lowest total cost as 'Best Value,' but you should also consider affordability, payment flexibility, and whether you're planning to pay off early. The calculator shows all key metrics so you can compare loans based on what matters most to you.

Question 4

How much do fees affect the comparison?

Accepted Answer

Fees can significantly impact which loan is the best deal. A loan with a lower interest rate might actually cost more overall if it has high origination fees or upfront costs. That's why APR (which includes fees) is so important: it shows the true cost. Always include all fees when comparing loans to get an accurate comparison using this calculator.

Question 5

How accurate are these calculations?

Accepted Answer

Our loan comparison calculator uses precise financial formulas and decimal maths to ensure accurate calculations following standard methods used by UK banks and lenders. The results show monthly payments, total interest, APR, and total cost, all calculated to match what you'd see from a lender. However, actual loan terms may vary slightly based on your credit profile.

Question 6

How is the savings amount calculated?

Accepted Answer

The savings shown in the comparison only includes interest and fees; it does not include principal differences. For example, if comparing a £50,000 loan against a £60,000 loan, the savings will only reflect the difference in interest and fees paid, not the £10,000 principal difference. This ensures you're comparing the true cost of borrowing, not the loan amount itself.

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