img
img
MyMoneyHelp home
Sign up for our newsletter!
Name:
Email:

corner cor cor
cor
MyMoneyHelp
Credit Reports
Personal Loans
Mortgages
Insurance
Debt Help
Credit Cards
Banking
Education Center
cor
cor cor co
corner cor cor
cor
Education Center
Banking
Credit Cards
Credit Reports
Debt Help
Insurance
Mortgages
Personal Loans
Glossary
cor
cor cor co
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan charges

Loan Charges and Loan Fees:
What You Need To Know

A key factor when deciding which loan to take up is to consider the different loan charges and loan fees that lenders impose on you. Some of these fees are transparent while others are more hidden. It is wise always to read the small print religiously before signing any loan agreement.

APR, TAR, MLR, and Base Rates

One of the most important loan fees is the APR or the Annual Percentage Rate. Some lenders try to lure you into a deal by offering incredibly low interest rates, but only for a short period of time. Do not be taken in by this initial low rate. Instead, the figure to look at is the APR, which is a standardized method of calculating interest charges, so that people can compare like with like.

If you find understanding APRs confusing, it might be worth asking your lender for the TAR or Total Amount Repayable. This figure will give you a precise repayment amount over a set period.

It is also crucial for you as a borrower to understand the meaning of the term base rate. Base rate is linked to minimum lending rate or MLR. Lenders use the base rank as the basis on which all other rates of interest are charged. Any change in MLR will affect base rates which will in turn affect the interest rate you pay for your loan.

Arrangement Fees

Arrangement fees are loan fees charged by the lenders or loan providers as an administrative charge for setting up the loan deal. For mortgages, this loan charge not only covers the cost of arranging the loan, but also serves as a premium charge for taking up a fixed rate or discount rate loans.

Try to shop around for a loan provider who does not charge any arrangement fees. Watch out for loan providers who charge arrangement fees which could be as much as 1% of the loan amount.

Exit or Redemption Penalties and Overhanging Lock-ins

Watch out for lenders who impose exorbitant loan charges and fees if you wish to:

  • Repay your loan earlier than initially agreed.

  • Exit from the loan and move to another lender or deal.

  • Switch deals or lenders after a special deal interest rate has expired.

Express loan transfer charges

Some loan providers offer an express service for those who are desperate to get their hands on the money quickly. Usually, once your loan is approved, the amount is transferred to your bank account or sent to you by check within four to five working days.

However, should you require the amount on an urgent basis, then you can opt for an express service where the amount is transferred directly to your bank account within twenty four hours of loan approval or less. That said, you can be charged a small loan fee for this convenience of between thirty to fifty dollars. Unless you are really in critical need of the money, this loan charge can be easily avoided.

Payment Protection Insurance

Certain lenders require you to take out a Payment Protection Insurance or PPI before they will agree to grant you the loan. Remember that PPIs are generally not compulsory, so do not be pressured into taking one out by your lender. However, PPIs can come in useful if you are unable to pay your monthly loan installment due to accidents or temporary unemployment or some kind of disability or sickness. It is crucial, however, to carefully check each policy as the terms and conditions vary. You do not want to be paying out in loan fees or loan charges for something you may not be able to claim against.

Visit our personal loan listing

 
 
 
 
 
 
 
banner

 
 
© MyMoneyHelp.com. All Rights Reserved.    Sitemap | Newsletter | About | Contact | Terms of Use | Privacy | Online Coupon Codes

Valid XHTML 1.0 Transitional

img