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Making the Bad Financial Option Look Good

We all want a good deal, particularly when taking out a personal loan or any kind of financial product. After all financial commitments are likely to last years and if you get a bad deal you could end up paying vastly more than necessary. However a good deal isn’t all about how much a product costs, customer service is extremely important and hidden charges can make a personal loan that seems fantastic suddenly much more expensive than anticipated.

A new report has found that while there are many fantastic deals available on the personal loans market those that are best for value often fall short when it comes to customer service and hidden charges. Additionally this can be applied across the board of financial products; mortgages and credit cards that have the best rates often have much lower customer satisfaction and more hidden charges.

While there is no excuse for poor customer service, naturally we all expect more when we pay more. However the accusation of hidden charges in the best rate financial products means you could end up paying more even when you think you’ve got a great deal. As an example the current media attention over payment protection insurance; where the cost of an insurance policy on a personal loan can increase your payments far more than imagined.

The report has found that seven out of the ten top personal loans charge two months interest if paid off early which would make them bad value for some consumers who may wish to get a large debt out of the way when they have more money available.

The same applies to credit cards and mortgages. The top ten rated fixed rate mortgages charge £504 application fees on average while those credit cards with the best introductory offers tend to charge more than other credit cards after the introductory period.

Current accounts with the lowest rates also charged more than anyone else for unauthorised debt. As well as identifying those products that are rated top for value but provide poor customer service or have hidden charges has also identified companies who provide the best customer service. First Direct was voted the best for customer service followed by Britannia Building Society, Tesco Personal Finance and the Co-op Bank.

One thing this does bring attention to is the fact that consumers need to have care to check not just what company offers them the best rate on a product, but additionally what any hidden charges may be or if the rates are simply introductory and likely to change. It is certainly possible to still get great deals while not having to endure bad service or tremendous hidden charges.

The Co-op Bank, who are rated high for customer service, also have a personal loan for 6.1% and Tesco Personal Finance provide a loan for 6.3%. If you shop online you should be able to get a great deal from a good provider and the advantage is there are plenty of websites that will provide information relating to financial companies and the quality of their products.

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