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COMMENT
Anyone who's read more than one of my articles will know that I'm passionate about getting people out of debt. (Indeed, this has come to the attention of a few television producers, so you may be seeing more of me on the box soon. Prepare for a shocking sight!) When I was a child – and even as a young adult – I admired my parents' attitude towards debt. If they wanted something, such as a holiday, car or some furniture – they would save up to buy it. Sadly, they, too, were bitten by the Nineties borrowing bug, and now have credit cards, a car loan and so on. Still, they live well within their means and borrow only what they need, so they haven't degenerated too much! My view is that if you want something badly enough, it's worth testing your patience by saving up for it. This anticipation can be half of the fun! (You'll find several savings accounts paying 5%+ AER here.) However, if you can't be bothered to wait and don't have the funds to hand, then you might opt for a personal loan instead. But be careful, because some loans are uglier than others, and most of the real horrors lurk on the high street! When choosing a personal loan, you should have four clear goals in mind: 1. To shop around for the best deal. Amazingly, up to half of us accept the first quote that we find, usually from our local bank branch. This is absolute madness, especially when you realise that there are hundreds of lenders willing to cut each other's throats to lend you money! 2. To pay as little interest as you can. In other words, look for a loan with the lowest TAR (total amount repayable) – the lower the TAR, the less that you have to fork out. Simple! 3. To pay it back as quickly as you can. Who wants a heavy burden that hangs around your neck for years like a dead raccoon? By choosing a shorter loan term, you pay less interest, too. Just make sure that you can afford those monthly repayments – don't be too eager and leave yourself overstretched. 4. To ignore all the gimmicks. You're borrowing money, not buying insurance or any other bells and whistles. Give all the other guff the elbow, especially high-priced loan protection insurance (expensive cover against death, accident, sickness and unemployment)! So, armed with these four rules, I set off on a search of the Web to find the cheapest deals for these three loans: £5,000 over three years; £10,000 over five years; and £15,000 over seven years. The first might be for, say, a holiday; the second for a car; and the third for a wedding (or divorce!). Here's what I found (courtesy of my trusty eMoneyfacts online database): £5,000 over three years Cheapest loan: TAR of £5,439 (5.7% typical APR) with moneyback bank - only available from the Fool. Most expensive: TAR of £6,503 (19.5% APR). Difference: an extra £1,064 of interest. Ouch! £10,000 over five years Cheapest: pay back £11,474 (5.7% typical APR) with moneyback bank - only from the Fool. Most expensive: TAR of £13,088 (10.9% APR). Difference: an extra £1,614. More money down the drain! £15,000 over seven years Cheapest: pay back £18,134 (5.7% typical APR) with moneyback bank. Most expensive: £20,579 (9.9% APR) Difference: £2,445. Almost two and a half large ones, blimey! So, there we have it. If you want a loan of £1,000 to £25,000, the best place to get it is via The Motley Fool. It took us a lot of work to win this special deal for our readers, but we did it all for love! One final warning: don't get a loan to pay off existing debts and continue to overspend, because that's the road to ruin. Learn more about that potential problem in The Dangers Of Rolling Up Your Debts! More: Check out the rates in our Personal Loan centre | Personal Loans Without Moans Or Groans.