Although we at Debt Free Me advise against taking out a loan if at all possible, we know that a loan can often be the best solution to many financial problems. With this in mind we are urging you to shop around and get yourself the best loan possible.
According a recent report from Sainsbury’s Finance more than a third of all people simply accept the first loan quote they receive, and as a result you could be paying up to 18.3% more money on payback. This may not sound a lot, but it is the difference of £1,404 over the course of a 3-year, £5,000 loan.
According to Sainsbury’s Finance over half of the people questioned simply chose their own bank or account provider for their loans, without looking at the other options available to them.
Steven Baillie, head of loans at Sainsbury’s Finance, said: “Given the increase in number and popularity of price comparison websites it’s surprising that so many people still go straight to their high street bank without comparing deals. There are many deals to be had but you simply won’t know how much you can save until you shop around a little.
“The difference in price between the most competitive loans and the rest of the market can be literally hundreds of pounds.”
Tim Moss, head of loans and debt at moneysupermarket.com, said: “As well as the amount you are looking to borrow, the other key thing that affects the cost of a loan is your credit score. These low rates are only available to those with excellent credit histories. Those without excellent credit histories continue to be charged significantly higher rates of interest.”
To find out if there are any black marks on your credit history, you need to take a look at your credit report. Under the Consumer Credit Act, you can write to one of the credit reference agencies, such as Experian or Equifax, and ask to see your file for a cost of £2. Alternatively, if you need to see your report in a hurry, you can check your file online, just make sure you cancel your online subscription once you have seen your report to avoid any unwanted costs.
Debt Free Me advise that if you must get a loan, then make sure you shop around, use the readily available comparison websites and make sure you get at least three quotes from different companies. Only once you’re sure you are getting the best possible deal for your individual circumstances, and you are sure that you can pay back the loan, should you go ahead with the loan.
