Debt consolidation
Worth doing when the new APR beats the blended rate of what you are replacing -- and when you stop adding to the old balances.
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One number that makes offers comparable
Unsecured instalment loans compared on APR, term and origination fee -- so a low monthly payment stretched over five years cannot pass itself off as the cheaper deal.
Why this is hard to compare
The problem
A longer term always produces a smaller monthly payment, and usually a larger total cost. Origination fees are often deducted from the amount you receive rather than added to the balance, which makes the effective rate higher than the stated one. APR over the same term is the only fair comparison, and it is the number we lead with.
What is on the table
Major purchase
A fixed schedule and a known end date, which revolving credit does not give you.
Unexpected expense
Speed has a price. Compare the fast offer against a slower one before deciding the difference is worth it.
Credit building
A clean payment history helps. Applying to many lenders in a short window does not.
Side by side
Same loan, different term
| Term | Monthly payment | Total interest | Reads as |
|---|---|---|---|
| 24 months | Highest | Lowest | Expensive per month, cheapest overall |
| 36 months | Middle | Middle | The common default |
| 60 months | Lowest | Highest | Cheapest per month, most expensive overall |
Illustrative only, to show the direction each term pushes cost. No figures here are an offer or a quote.
Ready to see the numbers?
Unsecured instalment loans compared on APR, term and origination fee -- so a low monthly payment stretched over five years cannot pass itself off as the cheaper deal.
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