When trying to determine if a personal loan can be regarded as cheap, most people tend to focus on the interest rate or annual percentage rate(APR) and compare this to competitive products. Although the loan industry has tried to simplify things for consumers by insisting that loan advertisments always carry a typical APR, that figure is not as clear cut as it may seem. The APR offered to one customer may not be offered to another, so a loan that appears cheap at the outset make not turn out to be so.

Employed applicants for loans are normally asked to provide proof of earnings by providing at least 3 recent payslips to the loan company. Self-employed applicants may not be able to do this and so are asked to self-certify their earnings. Loans approved under these self-certification circumstances have their own specific category and attract specific terms and interest rates.