This could be a difficult subject. There are many factors involved that could lead to a certain loan being the best loan for you.
However, over 95% of loan applicants would state that the cheapest loan would be the best loan and we can't argue with that.
So what is a cheap loan?
A cheap loan would be the loan with the lowest APR (Annual Percentage Rate). To find the lowest APR you need compare loans. However, deciding which is the best loan may not be as easy as comparing APRs, there are several other factors to be taken into consideration.
Are there any charges associated with the loan? These may include early redemption penalties or set up fees. If there is an early redemption penalty then this should be taken into consideration if you feel that you may be able to pay off the loan early. How much is it compared to the total cost of credit is a good place to start, this will tell you whether the loan is viable or not.
Is the APR fixed or is it a variable rate? A fixed rate is more desirable if you want the security of knowing all your payments that should be made until you pay the loan off in full. While a variable rate would be appealing to some if they believe that the interest rate for the Bank of England will fall in the future, making the loan repayments less.
