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What is a Comparison Rate?


Whether searching for an interest rate in the paper or on the net you will have noticed that alongside the annual percentage rate there is another interest rate – usually a little higher than the advertised rate, seek called a Comparison Rate. This is due to legislation where all lenders and advertisers of interest rates must disclose the true cost of finance.

A comparison rate is made up of the following:

• the amount of the loan;
• the term of the loan;
• the repayment frequency;
• the interest rate; and
• the fees and charges connected with the loan.

Once all of these buy generic klonopin online factors have been taken into account, and over a long term such as 30 years, the true cost of the loan can be seen. In cases where there are annual or monthly fees, the comparison rate will be quite high, however, when the loan is a basic variable loan (no ongoing fees), the comparison rate could be the same as the advertised rate or only slightly higher.

So, when looking at taking out finance, be sure to have the comparison rate disclosed. It could make the difference when choosing a lender.

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