Loans UK

The latest UK loan news and information for May-June, 2006

Personal Loans - What the Lender Will Not Tell You - In a recent article on Yahoo Finance UK, it was stated that 16 million people, which is over a third of the UK adult population, are not aware of this one fact: paying off you loan early can cost you. Banks and lending institutions frequently charge customers extra fees if they pay off their loan early, but they seldom make this fact clear up front.

When comparing loan offers, and you think you may pay off a loan early in the future, it may be a wise idea to ask about any additional fees that you may have to pay. Banks and lending institutions often hide this information in the small print so that many customers aren't aware of this condition. It can be a trap for those new to the UK loan market.

What other traps should you watch out for?

Ask about the APR. Current loan rates can vary from as low as 5.5% APR to more than 20% APR. All lenders must show the APR rate, and it also pays to ask for clarification.

Most people do not get the loan rate they ask for. This is because a credit score is factored in, so you may be charged above the going rate. According to an article on Yahoo! Finance, "under current Office of Fair Trading guidelines, lenders are obliged to offer the typical rate to just 66% of all accepted applicants so a third pay rates higher than the typical rate and this will not be known until after the application has been made."

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