Cheap loans seem to have grown in popularity over the last decade or so. Many financial experts put this down to the financial collapse a few years ago. This drove the need for cheap loans to help out families that were in tough financial positions.
Even though the financial market has healed, we still see plenty of cheap loans available and being used. The question is, are cheap loans actually cheap? They’re touted as an affordable loan that anyone can buy to relieve them of financial distress. In this blog, we will take a look at cheap loans and figure out just how cheap they actually are.
The History Of Cheap Loan Rates
Loan rates change over the years and can become more or less expensive than they once were. By looking at the historical rates, it helps us see whether or not cheap loans are actually cheap. If they’ve gone up in price, then there’s an argument to be made that they aren’t cheap at all. But, if they’ve decreased then it’s a sign they’re cheap and getting cheaper.
Recent reports from earlier this year show that loan rates have dropped and will continue to drop. The figures show that the cheapest loan rates of gone from 7.5pc to just 3.3pc in the last two years.
Based on loan rates alone, it can be argued that cheap loans are actually fairly cheap. It will certainly be much cheaper to pay for a loan now than it would’ve been in days gone by.
However, there are some additional charges that come into account with loans. This includes added interest when you miss a repayment date. There are some companies that hit you with huge penalty fees if you miss just one repayment date. Start getting a few penalty fees and the price of your loan can quickly add up.
There’s also one major issue at play here, what is considered to be cheap? A cheap loan for one person may not be affordable for someone else. It depends on the person’s financial situation and how much money they can afford to spend on a loan. The best thing to do is find a lender and then work out all the costs of the loan. Ensure you can afford the repayments so that you don’t end up incurring penalty fees.
In conclusion, cheap loans are cheaper now than they used to be. How cheap are they? It all depends on the size of the loan and the person applying for it. Regarding loan rates, there are some out there for as little as 3.3pc. This is a huge drop compared to prices in the past where they were sitting at around 7pc for the cheapest loans on the market. Consequently, yes, cheap loans have been made more affordable for people in Britain. Furthermore, there is a huge gap between the best loan rates on the market and the worst. Therefore, the best rates can be considered much cheaper than some of the other rates out there.