Many people could benefit from switching their loan provider
February 5, 2008
According to a recent report many people in the UK could see the benefits of switching their loan provider whilst still repaying their loan. Many of those with loans are nervous about switching to a more competitive deal because they believe that they will be financial penalised, and some consumers with loans are not even aware that they can switch their provider mid-term if they wish to do so.
Recent research indicates that some people could actually find themselves much better off financially if they switch to another provider offering a more competitive deal. However, the result of the survey showed that 30% of consumers with unsecured loans thought that the savings that could be made were too small to be worth bothering about, 20% thought that there was too much hassle involved in switching, and 6% had thought that switching was not even possible.
Officials state that around 25% of unsecured loan providers do not charge any penalty to customers that want to switch, and another two thirds charge only one month’s interest. The figures suggest that whilst someone with an £8000 loan may only be charged around £39 penalty by lenders that do charge a month’s interest they could actually save around £140 in interest over the remainder of the loan term by switching halfway through to a best buy loan.
A number of personal loan providers have cut their interest rates on unsecured loans since the base rate came down in December.
One official stated: “With more base rate decreases predicted over the next 12 months, it’s possible that we may see other providers following this example and offer more competitive deals than those available last year.”
Comments
Got something to say?