Consumers Encouraged To Shop Around For Personal Loans
We have reported on several occasions over the course of the past few months on how consumers in the UK are generally reducing their outstanding level of personal debt by paying off extra amounts on their personal loans and credit cards.
This has largely been due to the high interest rates which are often charged on personal unsecured loans and credit cards, along with particularly poor rates from high street banks’ and building societies savings accounts, having the effect of encouraging individuals to repay loan debt rather than save. But the latest statistics from the Bank of England have revealed that in December last year, the average amount of individual personal debt on unsecured loans, credit cards and overdrafts actually increased, for the first time since June last year.
With demand for personal loans increasing once again, potential borrowers have been advised to be careful when it comes to looking for a new loan and that they should take time to do adequate research to ensure that they obtain the best loan to meet their needs. Many banks and other loan companies are still licking their wounds following the credit crunch and recent banking crisis and are therefore extremely reluctant to offer personal loans to anyone, unless they have a perfect credit history. Even in these cases, interest rates on personal loans are at the highest level they have been for nine years, according to research from Moneyfacts.co.uk.
Moneyfacts.co.uk have advised potential borrowers that it is vital to shop around the market place, or use a loan broker or price comparison website to ensure that they are not paying over the odds for the personal loan they need. Michelle Slade of Moneyfacts said “With a £1,055 difference between the overall repayments on the cheapest and most expensive £5,000 personal loan, shopping around is the key.”
