Alliance & Leicester Could Save Consumers Money On Loans
According to the Alliance & Leicester Personal Loans, many UK consumers are unnecessarily wasting millions of pound on personal loans due to their lack of knowledge regarding Annual Percentage Rates (APR's). This in turn leads to some consumers not being able to make informed decisions about what personal loan is best for them and means, in some cases, unnecessarily paying over the odds for credit.
As a result, the Alliance & Leicester says the total of misspent money on loans stands at £285m due to UK consumers opting for loans with an APR of 10% as opposed to the Alliance & Leicester's typical APR of 5.9%.
The Alliance & Leicester feel that many high street banks are not competitive when it comes to lending, such as loans or mortgages, and rely on customer apathy towards shopping around for the best deals, to boost their own profits. As a result, many consumers unwittingly overspend on personal loans as they pay back more than they really have to.
However, not all consumers are eligible for these rates due to having a poor credit history for example and therefore have to accept a higher APR on their loans. Despite this, consumers should always shop around for the best deal possible as obtaining the lowest APR possible on a loan could save you a considerable amount of money over the lifetime of the loan.
Richard Al-Dabbagh, senior personal loans manager at the Alliance & Leicester, said: "We have known for a while that the big high street banks do not tend to offer the best deals, whether it is on current accounts, mortgages or personal loans.
"This research shows the staggering amount that people are overpaying for uncompetitive personal loans and how much the big high street banks rely on borrower apathy and lack of financial understanding."
3rd February 2007
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