Loan tarts can save money
Article Category: Debt Consolidation Help and Advice
Loan tarts who switch lenders mid-term to pay lower rates could save almost £1.25 billion, according to a price comparison website.
Research conducted by uSwitch.com has revealed that consumers with an £8,000 loan over five years could save £180 by switching to a best buy deal halfway through.
Around 2.5 million unsecured loan customers say they would not switch loans because the savings were insignificant.
One in four lenders does not charge anything to switch, although 67 per cent do charge an early repayment penalty of one month’s interest.
Mike Naylor, from uSwitch.com, says that with a volatile unsecured loan market, five years is a long time to stick to one provider as rates are constantly fluctuating.
He added: "Whilst consumers continue to display this level of apathy, loan providers will rub their hands together with glee and continue to profit from the not so tarty loan customers."
An £8,000 loan with a rate of 6.5 per cent APR repaid over five years costs almost £830 less in interest than the same loan at a rate of 10.9 per cent APR.
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