Consumers urged to switch loan deals
Published On 26 January 2008
New research has suggested the people in the UK could collectively save £1.25 billion in interest repayments by switching unsecured personal loans to better deals.Consumer website uSwitch.com found that one in four lenders do not change anything if a consumer wants to switch loans halfway through a contract.
Overall, the site discovered that the average cost of switching a loan was just £39, which compared to the typical saving on a more competitive deal of £166 annually.
In addition, the site pointed out that eight major personal loan providers have already dropped their interest rate by 5.5 per cent.
"In such a volatile unsecured personal loan market, five years is a long time to sick with the same provider as rates fluctuate constantly," explained Mike Naylor, personal finance expert at uSwitch.com.
"Switching unsecured loan providers mid-term is quick, easy and, in many cases, a money saver.
"Unfortunately, it's just not a practice that consumers are familiar or comfortable with. However, we can't ignore the fact that lending practices are getting tighter so the option to move may not be available for much longer."
Indeed, the site found that 1.4 million people in the UK would not bother switching their loan because they think the process will be too troublesome.
