Make Sure You Shop Around For Your Christmas Loan
Around twenty five percent of Brits will be taking out finance such as a personal loan in order to deal with the cost of Christmas this year according to the results of recent surveys, and experts have warned that in light of this information consumers should shop around for a good deal on a loan as quickly as possible. Unless consumers find a good deal on a loan in plenty of time for Christmas they could end up getting lumbered with high interest credit, or end up spending on store and credit cards with extortionate interest rates simply because it is too late to do anything else according to financial professionals.
Samantha Owens, editor at Moneyfacts.co.uk, stated: “With so many of us admitting we do not save for Christmas it is inevitable that we will have to borrow the money in one form or another. Adding up the potential savings for cards and loans shows that there are hundreds of pounds to be saved by shopping around for financial products. Consumers should not take the first personal loan or credit card they see.”
Figures show that the difference in interest rates charged on loans of the same amount car vary dramatically from one lender to another, and that by shopping around for the right loan consumers can enjoy huge savings on the overall amount that they have to repay. Taking out a loan over a credit card can prove more effective for many consumers, as it eliminates the temptation to make minimum payments, thus getting lumbered with the debt for longer.
In addition to shopping around for loans for covering the cost of Christmas, consumers are also warned to shop around for payment protection rather than automatically opting for the cover offered by the loan provider. Another Moneyfacts official stated: “The profit margin for banks on personal loans is small. This is the reason that lenders encourage their staff to cross-sell PPI as this can be extremely profitable to them. In some cases bank staff are targeted to sell this cover and have the opportunity to earn a financial bonus.”
1st December 2006