Tuesday, May 16, 2006
Category:
Secured Loans
Acquiring a smaller loan can often cost consumers more than a bigger loan, new research has found.
According to a study by moneyfacts.co.uk, many lenders offer lower interest rates on larger loans compared to smaller amounts.
The tier-based system used by the majority of lenders means that borrowing more can actually prove to be better value than opting for a smaller loan.
"Depending on the lender's exact loan amount requirements it may be worth some consumers borrowing just that little bit extra to push them into the next tier," remarked Lisa Taylor, an analyst from moneyfacts.co.uk.
Ms Taylor claimed that the highest rate offered by a lender can be double or even triple the lowest rate, depending on the amount borrowed.
Consumers looking for low APR personal loans are therefore advised to study interest rates carefully and consider borrowing a slightly higher amount if it proves beneficial.
