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Switching loans can save money

It is all too easy for consumers to become complacent when it comes to finances, and loans are one example of this. Many people remain with the same lender or the same loan set-up simply because it's easy and familiar. Yet studies show that consumers could save a substantial amount of money by changing their loan structures.

How much?

Up to £1,824 per year, which is certainly enough to make it worth investigating. Even better, as consumers learn more about the advantages of different lending programs, lenders are in competition for business, which means better terms and interest rates for the consumer.

What types of loans should you consider refinancing? Switching almost any kind of loan, including credit cards, personal loans, and mortgages could add up, particularly if you are looking into getting rid of high-interest credit cards.

In fact, a recent poll suggested that eighty-eight percent of credit card consumers plan to change providers in the next year. Consumers are also planning on other loan activities. Eighty-four percent of those polled planned on taking out a personal loan, and forty-one percent planned to move, which translates into new mortgages.

A change from a high-interest credit card to a card with zero percent interest could add up to 200 pounds per year or more. A 5,000-pound loan can translate into a savings of 419 pounds on a three-year loan, and mortgage savings can reach a whopping £31,932 in savings over the course of a twenty-five year loan. Of course, consumers cannot realize these savings if they do not shop around for the best loan offering for their needs and credit histories. Doing nothing can be costly.

If you are planning to make a major change in your finances, it pays to shop around for the best offerings. Those with good credit will have the best chances of obtaining lower-interest rates with good terms, but this does not mean that someone with lower credit scores need to stick with their present situations.

A little shopping around may indicate that a change is good for these consumers as well, which can translate into better credit in the end. Lower interest rates and better terms make it that much easier to continue making payments.

Where to shop around? Investigate all your options.

High street may not offer the most convenience, the best terms, or the best rates. Also, be sure to read all terms carefully. A low-interest rate may seem great, but if there is a penalty for closing the loan early, the savings may not be worth the lack of flexibility. Using the Internet is also recommended, as many lenders offer special rates that are only available to online shoppers.

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