Why do the APR’s on loans vary so much?
The business of providing loans is a competitive one and loan rates are at very competitive levels at the moment. Loan providers are therefore looking to attract customers with their most attractive rates. To get a loan at the lowest APRs however, you’ll need a very good credit history. If you credit history is damaged or you haven’t borrowed before, you may find that you have to pay more.
Generally speaking, the more you borrow, the lower the rate you’ll see quoted. Say you’re charged 9% interest on a £3,000 loan, but only 6% on a £7,000 loan. In such a situation, it may make sense to borrow the slightly larger amount - maybe £7,000 instead of £6,500 - to take advantage of the lower rate of interest but you should only borrow the amount you can afford to pay back as you still have to pay interest on the amount you borrow.