Anyone looking for a personal loan wants this to be as convenient as possible. How to find the cheapest personal loan available? This guide will help you evaluate the economic aspects of a loan.
Interest rates for a personal loan
The first aspect that needs to be assessed to find the cheapest personal loan is the applied interest rate . It should be noted that all personal loans see the indication of two different interest rates, the TAN and the APR.
What is TAN?
The interest rate indicated as TAN is the nominal annual rate , ie the interest rate applied to the personal loan during the calendar year. This rate does not correspond exactly to the interest rate actually applied to the loan, as in many cases the interest calculation takes place on a monthly and not annual basis.
What is TAEG?
The APR, ie the annual percentage rate of charge, is the interest rate that most closely reflects the actual cost of the personal loan, even if it is not used in the calculation of interest due. More than a real interest rate, it would be appropriate to consider the APR as an indicator that considers the real cost of the loan, therefore very useful for identifying the most advantageous personal loans. As explained above, usually the APR has a higher percentage value with respect to TAN, with a difference that varies depending on the amount paid and the repayment of the loan period. For more information on interest rates and the calculation of the interests of a personal loan, refer to the dedicated guide on the site.
The costs to be incurred for the personal loan
However, the interest rate is not the only aspect to consider in order to know which loan is cheaper. In fact, to find the most convenient personal loans, the expenses necessary for the opening and management of the loan, such as preliminary costs, initial expenses and periodic expenses, are also of considerable importance. Even if these items may appear to be negligible, please note that in some cases, especially if the amount of the personal loan is not high, they can significantly affect the amount to be repaid. The same applies to the collection of the monthly payment.
These items of expenditure are not applied uniformly by all banks and financial companies that issue personal loans. For this reason, prior to the signing of a loan it would be advisable to evaluate these aspects, which are not always explicit in the offer. Moreover, these items of expenditure are often subject to promotions on personal loans, for example with the cancellation of the costs of preliminary investigation.
The cost of insurance on the loan
Although it is an optional expense, to consider the most convenient personal loan it is good to consider also the cost of the insurance that is usually offered together with the loan. Insurance costs are usually proportional to the amount provided with the loan, but may vary considerably depending on who issues the insurance. Even if an additional insurance product represents an additional cost in repaying the loan, it is good to consider the proposed offer, as in many cases a personal loan insurance could be useful (for example, it is not possible to payment of installments).
The parameters listed above demonstrate once again the comparison between different products, both traditional and online, and the most effective way to find the personal loan that is more convenient. For this purpose it is very useful to use a personal loan comparator, an online tool that allows to evaluate the parameters described for different products, without the need to go to several banks or financial institutions and without the burden of having to enter several times. the data requested on the websites of the different realities that provide loans. Finally, keep in mind that the best personal loan does not exist in absolute terms , but there is the best loan for the needs of each applicant.