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Newsletter

Borrowers encouraged to 'compare loans'

By Sarah Engle, Fri 22 Aug 2008 - Published in Loans

As the interest rates on loans rise, it is more important than ever to shop around for the best deal, uSwitch claims.

Research by the group has found the interest rate on a best buy loan of £8,000 over four years has increased from 6.1 per cent APR to 7.4 per cent APR over the past 13 months.

Meanwhile, the rejection rates for loans are also on the rise.

Since the credit crunch kicked in, it is estimated that some 1.39 million people have had their applications for loans turned down.

However, uSwitch claims for those people who put the time in to shop around, good deals can still be found.

Simeon Linstead, head of personal finance, said: "The market is vast and there are still competitive rates for those who take the time to compare the offers available."

According to GE Home Money Lending, people who want to increase their chances of being accepted for a loan should make sure their credit files are up to date, close down any unused credit cards and make use of price comparison websites.