Those wanting to take out a loan should do their research or risk accruing debt problems
Those wanting to take out a loan should do their research or risk accruing debt problems
- Thursday, 13 January 2011Consumers who wish to take out a loan should do their research before doing so or they could end up needing
debt advice in the future.
Justin Modray of Candid Money stated that loan salesmen only focus on the monthly repayments, which can fool people who may end up paying more than they expected.
For example, a five year £5,000 loan with nine per cent interest will end up costing the borrower £6,176 in total.
If someone ends up struggling to pay this back they may end up needing a
debt solution such as a payment plan.
Mr Modray said: "If you take advantage of an interest-free deal when out shopping, be very careful to stick exactly to the loan terms and conditions.
"If you don't there's a good chance you'll suddenly find yourself being slapped with sky high interest on the debt."
Recent research by moneysupermarket.com found that two-thirds of successful loan applicants get the advertised rate following a promotion currently but this will drop to 51 per cent on February 1st, under new European rules.

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