I don’t think there is anyone out there who would knowingly and willingly take a costlier loan when a cheaper one is readily available to him or her. However to get a cheap loan the lending bank considers a lot of factors, such as your credit history. A borrower’s credit history allows the lender to gain an insight into the magnitude of risk as well as reward which they can obtain from lending at a certain interest rate. So, if the applicants credit history is bad then the bank will compensate themselves by offering the loan at a high interest rate, however in some instances the risk of default will be too high and hence the bank will refuse the loan application. Similarly, if the borrower has a good credit score then they will benefit from getting the loan at the lowest rate possible.
To add, the APR charged by the banks is also influenced by the amount being borrowed and the repayment period. So when taking out a loan, it helps to be aware of the various options and the payment terms and conditions. By being aware of all the various options, you will be able to work out if you are willing to take on the debt with the additional T&C’s such as some lenders may not allow the whole debt to be repaid in a lump sum or they may charge an early repayment fee as this effectively means that they have lost out on the future repayments.
If you move from one bank to another don’t expect to find a flat rate charge throughout the different institutions. Bank rates are so diverse that if you are out to secure a cheap loan, it takes a whole lot of your precious time just to figure out which is the best and worst option. At FreePriceCompare.com we make the whole comparison seamless, by evaluating 100s of possible options we can let you know the best loans for your specific criteria. As always, our service is FREE, INDEPENDENT and IMPARTIAL so you can be rest assured that our service is in line with your interests.