Understanding personal loan comparison rates

From funding your next getaway to making home improvements, you might be considering a personal loan to help bring your grand ideas to life.

When comparing personal loans, check out the comparison rate. Lenders must display their comparison rates alongside their interest rates, and it can be a helpful factor in deciding if a loan is right for you.

Here’s what to know about comparison rates and why they’re worth a closer look.

What is a comparison rate?

While an interest rate explains the rate of interest you’ll pay on a loan, a comparison rate is an adjusted figure which can provide a clearer picture of a loan’s true cost.

Comparison rates are calculated using the interest rate, as well as other fees and charges associated with the loan. These typically include upfront fees, any ongoing costs and discharge fees.

Why is a comparison rate useful?

A comparison rate can help you look beyond enticing low-interest rates by revealing hidden fees that could lead to higher costs over time.

When considering your loan options, a comparison rate could help you make an informed decision that aligns with your budget and lending goals.

What is excluded from a comparison rate?

While they can be a great way to help you compare loans, keep in mind there may be a few costs that comparison rates don’t include.

Also, a comparison rate is just one factor to consider. It's important to explore the features of the loan to ensure you find an option that’s right for you.

How to get started

If you’re looking to take the next steps in your loan journey, you can get a personalised comparison rate with Liberty.

Simply enter your details here and receive a tailored interest and comparison rate based on your credit profile. You could get a rate quote in under 2 minutes, without affecting your credit score.

Discover your personalised rate today to help make an informed decision.