Save £700 on a £4500 loan

Here's how you can reduce the cost of a five year loan by over £700.

Few people realise this but typically the lower the loan amount the higher the rate of interest you pay. It's understandable that some people are confused by this concept but here's why it happens and what to watch out for.

Firstly, the higher the APR the more you are going to pay for the loan. Keep a close eye out for this as it takes account of the interest and any fees or charges. We've just researched some unsecured loans and here's what we found:

If you borrow £5000 over 5 years the APR is 8.7%, costing £102.27 per month with £1136 in interest costs. By comparison, if you borrow £4500 over 5 years the APR is 12.7%, costing £106.28 per month with £1877 in interest costs

If you're looking for a loan it's wise to look at rate tables as well as best buy guides. The rate tables will show you where the APR banding changes and in the example above may make sense to borrow slightly more to save interest on the loan you are taking out.

For some loan ideas and information contacts us today.

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Disclaimer: Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Loanz.co.uk are licenced credit brokers with licence number 584328 issued by the Office of Fair Trading. Loanz.co.uk is a trading style of CML Web Services Ltd. Registered in Scotland. No: SC291366

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