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Is APR The Only Thing That Matters On Personal Loans?

By: Melissa Kellett

You always hear that in order to get a good deal on a personal loan, you have to search around and request loan quotes from many lenders before deciding which offer is best for you. However, what should you look at when comparing loan quotes? Is the APR the only variable to consider? Within this article you will find the answers to these questions.

Personal Loans

Everyone knows personal loans issued by banks and traditional financial institutions. Even though the financial industry has evolved over the years and everyday there are more and more financial products, banks and traditional financial institutions offer only a limited range of options on personal loans.

Collateral

There are secured and unsecured personal loans. The security (or collateral) is also an important factor to be taken into account when shopping for a lender. If you can provide collateral you may get a much better interest rate than with an unsecured loan. Nevertheless, you should also compare APR as if the difference is not that significant it is not worth the risk of loosing your property.

Interest Rate Type

The interest rate charged for the loans can be fixed or variable. If fixed, it will remain the same over the whole life of the loan. And the monthly payments will not vary over the months if there are market variations. Variable interest rates tend to be lower but can be modified if market conditions change thus risking a significant increase in your monthly installments.

APR

APR stands for Annual Percentage Rate, it is the annual cost of the loan and includes interest, service charges, loan fees, insurance, and other items. Since it includes almost every aspect of the loan it?s an excellent way to compare loan quotes. However, as stated, it includes only almost every aspect. There are some factors that cannot be measured, are too difficult to measure or have a different value for each person according to their financial and credit situation. Thus, these extra variables cannot be included into this percentage.

Other Things To Take Into Account

The Personal Loan flexibility should be taken into consideration too. Being able to repay the loan early if you run into extra cash or get grace periods if you happen to suffer a momentary reduction on your income are two worthy features. However, the actual value of these features cannot be calculated in advance and thus are not included in the APR.

There are also some fees that due to their nature are not included in the APR, some of them are: Arrangement fees, closing costs, set up fees, Administrative fees, etc. Since the APR is calculated with a procedure established by the federal government, these fees and costs (not present on all kind of loans), where not contemplated and thus are not included in the APR formula.

Be aware that some low APRs, are only available for a promotional introductory period. After the period has ended, the APR may skyrocket, so make sure you read the fine print and do your comparison with the real APR. Finally, you should be especially careful with penalty fees that are charged when you miss payments or pay late which can turn out to be too onerous too and are not included in the APR.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9102.shtml

Evil Corporations Forced To Do Good

By: Daryl Cowie

Could evil corporate America actually be helping us?

When it comes to business most of us take one side of the other: Business owners are either viewed as helpful visionaries or evil devils. The evil view feels that the heads of major corporations exist to fleece our pockets and take our money. They?d roll us in the alley given the chance. If you?re looking for a bad guy, few compare to the faceless evil of corporate America so often portrayed in today?s media. The evil corporation is out to get your money!

If you ever bother to take a second look with the good light turned on, you will have to admit that successful businesses are there helping us fulfill our needs and desires at every turn in ways we could never achieve without them. Are they being good and helpful, or are they evil and opportunistic?

Well here?s the low down. Are they in it for themselves? Absolutely! Are they also in it for you? Absolutely! Fundamentally successful businesses are started for two reasons.

1. To help themselves (selfish devils)

2. To help others (kind-hearted angels)

Is it possible they could do both? Yes, they can do both. In fact they need to do both to remain useful to themselves and to remain useful to others.

Think about your favourite store, maybe it?s a stereo shop, a clothing store, or even a grocery store. What happens if they raise their prices so high, or hire such rude sales people that you and your friends stop going there? They start losing money and go out of business. You probably wouldn?t care, but they would no longer be able to help themselves, at least not with that business.

Now what happens if that same business hires lots and lots of really nice people to spend extra time with you, and then lower their prices so you get everything at near cost? They start losing money and go out of business. The only difference is this time you care, because now you can?t go back to that friendly store. Now you can?t return that item you didn?t want, or get it fixed under warranty. Because they didn?t help themselves enough, they can?t help you any more either.

So what do businesses do? Simple, they help themselves by helping you. Or they help you by helping you. It doesn?t really matter. In a rare twist of fate, evil corporations with all their worst intentions are forced into doing good and helping others to stay alive.

The business that figures out how to help others the most becomes the leader. It makes no difference whether the owner?s motivation is evil desire, or helping others. The only way to achieve long term success is to help others. There is no other reason for people to patronize a business, other than to get something they either need or want. If a business doesn?t help you get that as much as their competitor up the street then they go out of business. If a business helps you so much they can?t make a profit, they also go out of business and are not much help to you in the long run. Every successful business helps itself by helping others.

Who says the world is evil. Score one for the good guys.

Article Source:
http://www.articlecity.com/articles/business_and_finance/article_9037.shtml