Special Interest Rates

A special interest rate is a short-term promotional rate that a lender might use to attract more customers within a short space of time. The loan will initially offer a good deal, but quickly become more expensive, and you may be tied into a deal which is worse than the standard loan packages available. If a bank is offering a 'special' interest rate, approach it with an element of sceptism: it may only be available to those who meet certain financial criteria, or it may require you to borrow a certain amount of money over a long repayment period (for example, a minimum of £7,500 over sixty months). Always consider that if you borrow more than you need purely because you will be given a lower interest rate on your loan, you are not in fact saving yourself any money, only gaining debt that you did not need. Only ever borrow the minimum amount to cover your requirements; you can always apply to borrow more at a later date if necessary.

Special interest rates can hide hidden costs, such as high financial penalties charged for early or missed payments: always seek independent advice regarding the most suitable type of interest rate and loan for your needs. Remember that a lender's own advisers will be biased towards their own service, and may only give you advice on the products that they offer themselves.