A new survey has warned consumers that loan deals with low rates may not always be the cheapest solution.
While they may look tempting on paper, consumers need to be aware of arrangement, exit and valuation fees, which can dramatically hike up the cost of the transaction, according to the study be moneysupermarket.
It was revealed that a secured loan at 4.49 per cent could end up being £250 cheaper across two years than loans offered at a lower rate.
Louise Cuming, head of mortgages at moneysupermarket, said: "It's a clear misconception to assume that the lower the rate, the lower your total costs will be over the term.
"Assessing a mortgage by true cost analysis allows the borrower to see exactly how much they will be paying over the course of that deal." To read more about loans, click here.
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