Borrowers 'must shop around' for right loan
Published On 7 January 2008
People in the UK thinking about taking out a personal loan or debt consolidation should make sure they research different products to get the right deal.That's according to Moneyfacts, which warned that as long as consumers get the right rates and fees, a personal loan or balance transfer can be a good way to sort out new year debts.
"Consolidating your debts onto one loan can prove an ideal solution. It could cut your monthly payments and see your interest bill lower," said Lisa Taylor from the finance website.
"Also for those less disciplined, the fixed monthly repayment might offer the structure you need to commit to repay the debt within a given time."
She warned, however, to ensure that all extra costs are factored in before deciding on a new loan deal, such as payment protection insurance - the cost of which can vary widely.
"Remember, a personal loan is usually a large long-term fixed financial commitment, so don’t blindly plump for the first deal you see," Ms Taylor advised.
A recent study from uSwitch revealed that UK consumers are spending £93 billion in interest on various loans and debts each year, of which consolidation could save up to £15 billion.
