Most of us want two key things in a bank loan: low interest rates
and instant approvals
. Pick the right provider and we can get both of them. But pick badly and we can easily wait twice as long and pay twice as much for our money.
This independently researched and written guide to bank loans shows how to find the right provider and get the best deal on the market. It also shows how to avoid some of the common pitfalls that can add hundreds of pounds to the total cost of a bank loan.
Personal loans 'most popular for debt consolidation'
Around one in seven adults have turned to debt consolidation in an attempt to address financial problems, with unsecured personal loans the most popular way to do this, according to new figures from Moneyexpert.com.
The finance website found that 36 per cent of adults chose unsecured personal loans to pay for debt consolidation, while 18 per cent opted for a remortgage
and 15 per cent chose a credit card with a zero per cent interest rate.
Over six million people have taken on more debt in the last three years in order to regain control of their borrowing, with the average consolidation loan standing at £13,000, while around six per cent of those who have consolidated debts in this period have taken out more than £50,000.
The website calculated that unsecured loans offered among the lowest interest rates, although mortgages and secured loans were competitive. They also offered shorter terms and required borrowers to commit to a repayment schedule, although anyone borrowing over £50,000 would have to remortgage or take out a secured loan.
Chief executive of Moneyexpert.com Sean Gardner said: "Debt consolidation is entirely sensible and a good way to get your finances under control if you owe money to different lenders at varying rates of interest. Theoretically you can reduce your monthly repayments and make your debts manageable.
"However it only works if you accept consolidation is a wake-up call to get your borrowing under control and then work to become debt-free," he added.
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Families urged to review loans
A typical family could save £168.80 in interest payments a year if they changed to the most competitive personal loan offer on the market, it has been claimed.
Price comparison site moneysupermarket.com said that many Britons would be carrying out home improvements over the forthcoming bank holiday weekend, although by reviewing their finances they could make significant savings
which could boost renovation plans
The site advised that there were still six personal loans on the market offering an APR of less than 6.5 per cent and based on taking out £7,000 over five years, a typical family could save £168.80 a year in interest payments with a loan at a 6.4 per cent APR, compared to one at 10.9 per cent.
On top of this, Britons could maximise their savings by choosing an account with a higher interest rate
, the site said. While keeping £10,000 in an account paying 1.85 per cent AER would earn £185.04 interest over a year, the same amount in an account paying 5.8 per cent AER would earn £579.86 - £394.82 more.
Stuart Glendinning, managing director at moneysupermarket.com, said: "These savings can be made without changing your lifestyle or spending any less - all it costs is a little time to find the best deals for you and your family."
Painting and decorating is the most popular type of DIY home improvement among Britons, according to research from Halifax.
Neil Simpson is a former Personal Finance Journalist of the Year and writes regularly on property, mortgage and insurance issues for the Mail on Sunday, City AM newspaper and many other publications.