• Simple Definition: A comparison rate goes beyond the advertised interest rate to show you a loan’s ‘true cost’, including fees and charges.
  • Why it Matters: Comparison rates help you find the best value loan. Think of it like comparing apples to apples, even when those apples have different price tags.
  • The Fine Print: By law, lenders MUST display the comparison rate along with the interest rate. It might be higher than you expect because of those extra charges!
  • Example: A loan with a slightly higher interest rate might have a lower comparison rate due to fewer fees, saving you money over time.
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