Apathy ‘can deny best loan rate’

Consumers can often miss out on the best unsecured loan rates – and it is their own fault.

Such a point has been made by spokesman for Moneysupermarket.com Paul Lawler, who said many people are not doing enough to find the best value goods and services, be these loans or other financial products.

Indeed, many could be adding to their debt management problems by paying more than they need, with Mr Lawler noting a lot of consumers lose hundreds of pounds each year by missing the best energy deals.

Explaining why this happens, he said: “I think apathy does reign and a lot of consumers do feel it’s not worthwhile shopping around.”

Mr Lawler advised when people do take loans, they should consider whether they should borrow a little more, due to the lower levels of interest they will pay if they borrow above certain thresholds, such as £7,000.

He noted some people will “pay back less over the term of the loan” as a result of borrowing in this way.

Finding a good rate to help consolidate existing borrowing may be a good way of getting debt free sooner rather than later.

The apathy of many consumers was highlighted in a survey by Sainsbury’s Bank in November last year.

It found 33 per cent of those taking out a loan only saw one quote before applying for it, which could mean many missed out on cheaper deals elsewhere.

The study noted over half the people taking out loans in the past five years have done so with their current account provider.

By Joe White