Personal loans - More IS less
Individuals who are considering applying for a personal loan could make marked savings through an increase in the amount that they request, suggests a new report.
According to recent studies by one of the UK’s leading financial research firms, a notable amount of lending institutions have been found to charge considerably higher rates of interest on lower value loans, which are typically defined as being advances with a yield of less than £5000. It has also been suggested that consumers could stand to pay even more if their requested advance is over a relatively short term.
One example used to demonstrate the claim showed how the typical APR tagged to a popular personal loan plan fell by almost 50% as a result of the borrower increasing their requested amount by just £1 from £4999 to £5000.
A representative for the research firm said that consumers must be aware of how loan lenders price their plans before making their final decision. A persons unique credit profile is not the only factor used to determine the cost of a loan, as the actual amount requested can also have a substantial bearing as well as desired loan term. Ultimately, it is up to the borrower to instigate their own research before they decide on a provider, but knowing the variables, which are used to price loans beforehand, is a big advantage.
On the other hand, by absolutely no means should borrowers increase their desired advance by a substantial margin simply for the sake of reducing their overall repayment rate, as such actions will quite obviously cost the borrower a lot more in the long run.
