With Christmas having just passed, many people will be seeking to consolidate their debt, not least if this has increased due to festive spending, so …
With Christmas having just passed, many people will be seeking to consolidate their debt, not least if this has increased due to festive spending, so now may be a good time to look around for a loan.
Such a situation has been noted by Andrew Hagger of Moneyfacts.co.uk, who observed that some of the largest providers of personal unsecured lending have been trimming the cost of their larger loans.
He noted the leading six players in the market have dropped their rates by between 0.1 per cent and 2.4 per cent, with M&S Money offering the greatest reduction.
This would amount to a £522 saving over five years for a £7,500 loan, or £695 if £10,000 was borrowed.
However, Mr Hagger added, such deals are often restricted to existing customers, with M&S and Tesco being the only leading firms to make these new rates available to all.
A second caveat is that such cuts only apply to larger loans and those looking for smaller amounts such as £2-3,000 may be paying interest rates of nearly 20 per cent.
Such figures may indicate that those thinking of borrowing in this way may wish to do plenty of shopping around, but might also consider taking out a larger loan to consolidate all their existing borrowing.
By doing this, it may be possible to save money by bringing a number of debts together into one payment and having less to pay overall because the level of interest charged will be lower.
The new year will be the busiest time of 2011 for loans, because so many people will have debts to deal with after Christmas overspending, head of loans at Moneysupermarket.com Tim Moss recently predicted.