Comparing Short Term Loans How Much Interest Would You Actually Pay
The rate of interest is the most important factor while applying for a loan or when comparing short term loans. Short term loan eligibility or qualifying criteria, loan amount, term and turnaround time or approval time, all are important aspects and should figure in your comparison. But the rate of interest is the singularly most important element.
You will come across lenders that will advertise its interest rate upfront and in most cases it will be mentioned as the maximum or as the minimum rate. Some lenders want to highlight the minimum rate of interest for obvious advertising purposes. Some mention a maximum rate so people know they wouldn't have to pay any more than that. Both are acceptable practices from the perspective of the lender and for the borrower. Except, you need to know exactly how much interest you would have to pay.
Checking snippets of information at the outset is one thing, comparing short term loans just before applying for while deciding requires specific information in every sphere. You should know precisely how much interest you would pay and throughout the term. The rate cannot vary. The lender cannot withhold the rate or present you with one and then mention another rate when the loan approval and disbursal documents are sent out. There can be no ambiguity, uncertainty or concealing in regards of the rate.
If you find a proposed rate of interest or any term that makes the rate appear tentative and not certain, then you must protest and ask for a confirmed rate of interest. It is not common practice to conceal rates of interest or to propose one and then charge another but some lenders do put forth minimum, maximum, up to or starting from rates, which are definitely ambiguous or uncertain. You need surefire rates in writing that wouldn't change.