Why are two quotes for the same loan so different?

2 min read

NormalA wide spread is expected

Total repayableThe only fair comparison

Same termCompare like-for-like

Fees includedRate alone misleads

Why the spread exists

Each lender has its own cost of funds, its own appetite for your sector, and its own read of your accounts. One may specialise in your industry and price it keenly; another may see it as unfamiliar and load the margin. One may weight recent bank data heavily; another may lean on filed accounts. None of this is inconsistency — it is simply different businesses pricing the same risk from different starting points.

See how a rate is built for the parts that vary.

The trap of comparing headline rates

A lower headline rate is not automatically the cheaper loan. One quote may bundle an arrangement fee into the rate while another charges it separately. One may use reducing-balance interest and another a flat rate, which look similar but cost very differently. A short-term product quoted as a factor rate cannot be compared to an annual percentage at all without converting first — see APR vs factor rate.

How to compare them properly

Ask each lender for the total amount repayable on the same drawdown and the same term, with all fees included. That single figure strips out the presentational differences and shows the real price. Where terms differ, also look at the cost per month so a longer, cheaper-looking loan is not hiding more total interest.

The true cost of borrowing calculator puts two offers side by side. The true cost guide explains what to watch for.

When the more expensive quote is the right one

Price is not the only variable. A slightly dearer facility that funds faster, has no early repayment charge, or offers a revolving structure you can dip in and out of may be better value for your situation than a cheaper fixed term you cannot flex. Weigh the total cost against how the facility behaves.

When you want a firm Credicorp quote to sit alongside the others, start here.

Frequently asked questions

Should I always take the cheapest quote?

Not automatically. The cheapest total repayable is the right starting point, but check the terms behind it: early repayment charges, whether the rate is fixed or variable, drawdown speed, and whether a personal guarantee is required. A marginally dearer facility with better terms can be the better decision. Compare total cost first, then weigh the terms.

Can I use one quote to negotiate another down?

Yes, and you should. A competing written quote is the single most effective negotiating tool in commercial lending. A lender that wants your business will often improve its margin or waive a fee to match or beat a rival offer, particularly if your accounts support it. Always get quotes in writing before you use them.