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There are two figures that are used to measure the cost of a loan, and they are often confused. One is the annual percentage rate (APR), and the other is the interest rate. The interest rate is simply a percentage, and varies directly with the amount borrowed. The APR, however, takes into account all costs such as setup fees and annual charges ' as well as the interest itself. So a 10% APR loan is cheaper than a 10% interest loan that has charges on top. It should be pointed out, however, that APR is the standard figure, enforced by law, by which loans should be advertised. Also, there are avoidable charges, such as late payment fees, which don't have to be part of the APR.

So when you're looking for cheap rate loans, the first thing to find is the APR, a truer reflection of the cost than the interest rate alone. Now the real fun begins. On the internet there are hundreds of loan companies after your business, and a host of comparison sites that will let you directly compare one loan with another and, in most cases, actually lead you straight through to an application form when you've settled on a product.

Because of this instant comparison, the providers have had to raise their game when conjuring up their APRs, and now cheap rate loans are no longer the sole privilege of those in the know. With such fierce competition, a brief browse on the net can throw up some amazing deals for any purpose. If you've got existing debt from credit or store cards, or even other loans, it might well be worth having another look to see if you could clear them sooner and pay less every month. It's almost certain that you'll find a cheaper deal.