There are a number of factors used by lenders that go into pricing the interest rates on a loan. These factors can broadly be broken down into two categories:
? The product you are seeking
? Your credit rating
In many cases, it is the nature of the credit you are seeking that will determining to a large extent the cost of that credit. Unsecured credit is more expensive than secured credit. This is because the risk taken on by the lender with unsecured credit is greater. If you can provide your home or other property as security against the loan, then you are virtually guaranteeing to the lender that there will be sufficient funds to repay the loan. In exchange for this added security, the lender will be willing to offer you far lower interest rates.
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