25 January 2008
UK consumers are being advised that if they switch their personal loans halfway through the repayment period they could save an average of £180.
Research conducted by the independent price comparison and switching service uSwitch.com, found that on average, consumers with an £8,000 loan over five years could save £180 by switching to a best buy deal half way through - totalling £1.25 billion.
According to uSwitch, one in four loan providers allow consumers to switch loans without any penalty and 67 per cent charge just one month's interest which is around £39.
However, 2.5 million unsecured loan customers say they wouldn't switch loans because the savings are too small and 6% are not aware that switching loan providers is possible.
Mike Naylor, personal finance expert at uSwitch.com, said: "In such a volatile unsecured personal loan market, five years is a long time to sick with the same provider as rates fluctuate constantly.
"For example, in the second half of 2007, more than 30 providers increased loan rates by around 1% APR. However, since the last base rate cut at the beginning of December, eight major lenders including Alliance & Leicester, Moneyback, Lloyds, Barclays and Sainsbury's have already cut their rates by up to 5.5% APR.
"With more base rate decreases predicted over the next 12 months it's possible that we may see other providers following this example and offer more competitive deals than those available last year."
He added that switching unsecured loan providers mid-term is quick, easy and, in many cases, a money saver.
Sometimes a personal loan is a good choice, perhaps you want to consolidate your credit cards or buy a new car. Whatever your needs, let uSwitch.com help you find one to suit. We're impartial and comprehensive and won't charge you for using our service. Compare personal loans and apply online.
Start switching
< Back to market news
© 2008 Adfero Ltd
Content for the uSwitch.com market news service is provided by a third party, Adfero Ltd. Whilst uSwitch.com makes reasonable efforts to check the reliability of this content, uSwitch.com does not guarantee the accuracy thereof or endorse the views or opinions given by Adfero Ltd, unless expressly stated otherwise.