24 May 2005
New research has revealed that millions of borrowers may have paid more than they should for their personal loans because they failed to shop around.
According to a survey by Sainsbury's Bank nearly 14 million people have taken out personal loans in the past five years, but a worrying 38 per cent of them did so after only one quote.
As a result of this failure to shop around, Sainsbury's Bank estimates that 2.8 million people will take out a personal loan this year and will collectively pay £650 million more than they should for the duration of their loans.
The survey also revealed that a third of people believe they have to bank with an organisation in order to apply for a personal loan from them.
Sainsbury's Bank said: "This explains why high street banks still dominate the market despite the fact that they don't offer the most competitive rates."
Rachel Brereton, a loans manager for the bank said: "Sadly, many people don't shop around when taking out a personal loan and this can cost them thousands of pounds in excess payments."
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