Consumers 'may save' by switching loans - 25/01/2008

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Consumers may save money on their unsecured personal loan payments by switching mid-term to a more competitive plan, according to uSwitch.com.

According to the price comparison and switching service, if a loan provider charges a fee for changing plans mid-way through a term, this cost is still usually lower than the interest they would eventually pay on the original plan.

The site added that with rates from eight major providers falling since the new year, now is a good time to consider switching a loan to a more competitive rate.

"In such a volatile unsecured personal loan market, five years is a long time to sick with the same provider as rates fluctuate constantly," said Mike Naylor, personal finance expert at uSwitch.com.

"While they still can, consumers should give loan providers the wake-up call they need and move their business elsewhere if better deals become available," he added.

The service offered a number of tips for consumers thinking about switching loan providers, including contacting lenders to find out the cost of paying a loan back early and comparing this cost to that of switching to a new loan.

According to Moneyfacts.co.uk, the current falling loan rates may be a strategic marketing drive on the part of lenders, as January is considered to be "the season of debt consolidation".

© Adfero

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