Expectant parents should shop around for loans to avoid debt problems
Expectant parents should shop around for loans to avoid debt problems
- Friday, 29 October 2010Parents expecting a new arrival soon should shop around for the best deals if they are considering a loan to purchase the items needed as high interest rates could lead to
debt problems.
Sainsbury's Finance revealed that new parents have borrowed a total of £2.32 billion over the last five years in order to buy prams, cots and other items needed for a new baby.
The firm estimates that the average cost of a new arrival is £2,980 and that the average amount that parents borrow amounts to £5,010.
If a household is considering taking out a loan to help fund the new arrival they could shop around for the best deals as the company found that the cost of borrowing this amount of money over three years can vary by £1,403.
Therefore, if a loan with high interest rates is obtained, parents may struggle to pay it off and may need to seek
debt help in the future.
Steven Baillie, head of loans at Sainsbury's Finance, said: "Taking out a loan with an uncompetitive rate can make a huge difference to the overall costs."
Director of Women in Debt, Nicola Scowen, recently urged mothers on maternity leave struggling on a reduced income to consider all their options before resorting to a loan.

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