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Refinancing Debt

Did you know that switching lenders can save you money? Just because you agreed to a loan in the past, doesn’t mean that you have to stick with it forever. Most people stick with the same lender for years and years. Often without even checking if better rates and terms are available elsewhere. Reasons for staying with their lender include:

  • Easier
  • Not aware of alternatives
  • Trust their current lender
  • Fear penalties for switching lenders

Study after study shows that if consumers stay up to date on alternatives, they can save an average of almost £2000 per year. This is a good reason to shop around. Also, as consumers demand more and more from lenders, competition increases and terms and rates improve.

If you are curious as to which loans are worth refinancing, the answer is that almost all of them are. From credit cards, to personal loans, to mortgages, shopping around is likely to get you substantially better rates thus saving you thousands of pounds. Recent polls show that most consumers are willing to consider switching credit card issuers, consolidate their debt with a personal loan, and move, which means a new mortgage, within the next 12 months. All of this translates into considerable refinancing.

Take the following examples as illustrations:

While many people simply do not bother to take the necessary steps, making these changes can save you tens of thousands of pounds in interest over your lifetime.

The most basic advice anyone can offer you is always shop around. There are huge variations in terms and rates, and only by shopping around will you find them. If you have a good credit rating and steady income, lenders will be lining up to give you credit, so don’t be afraid to demand good terms. The chances are you are going to repay them and they know this. This is not to say that those with less than perfect credit scores can’t save money. Deals are open to everyone who is willing to shop around and find a better rate. Also, if you are finding your current payments difficult, shopping around makes all the more sense as lower payments will be easier for you to keep up with.

 

 

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