While shopping for unsecured personal loans you usually look for a loan that is less burdensome and you can repay it easily so that you do not build debts. However, generally people just see interest rate on the loan and think that a lower rate is enough for best deal. They better note that when looking for unsecured personal loans it is the APR [Annual Percentage Rate] that only matters in terms of a real cheaper and burden less loan deal. A low APR matters most in taking unsecured personal loans as already such loans carry higher interest rate.

The difference between a simple interest rate and APR is that while interest rate is largely a basic rate that is prevailing in the loan market, APR is not only interest rate but includes many charges and fees that a lender takes from the borrower. We can say it is an effective interest rate which the borrower pays on a loan. In APR what usually includes is pre- paid interest, which is interest paid to the month end from the date the loan closes and usually 15 days of interest is calculated., loan processing fee, underwriting fee, document preparation fee and some lenders may charge loan application fee also.

When searching for a low APR unsecured personal loan you are in fact finding true cost of the loan. Such a lender will not hide fees and will not be advertising just a low rate.

Also note that while comparing APR on unsecured loans you should note that the comparison should be made for the same duration loans. You should first ask for the lenders different loan fees and compare them. The lender having lower fees has a lower APR on unsecured loans. So next time you look for a low APR unsecured personal loan take these basic aspects of the loan into account for a suitable deal.