You see a shiny 5.29% interest rate in big, bold font. Then, right next to it, in a font so small it requires a microscope, you see a 5.80% "Comparison Rate." Why the discrepancy? chawlafinance.com.au believes in transparency, so let's pull back the curtain.
The "True" Cost of the Loan
The interest rate is just the cost of the money. The Comparison Rate is the interest rate plus the standard fees and charges associated with the loan (like application fees or annual service fees).
Think of it like buying a cheap flight. The ticket is $50, but by the time a bag, a seat, and a tiny cup of water are added, it’s $150. The $150 is the comparison rate. If the gap between the two rates is huge, the lender is likely hiding high fees in the fine print.
Disclaimer: The information provided in this blog is general in nature and does not constitute personal financial or credit advice. Please contact chawlafinance.com.au so we can discuss your scenario in detail.