Do you want the best deal on a personal loan?

If so, it is vital that you shop around and compare the various loan deals from the UK’s leading loan providers.  That’s the advice from Sainsbury’s Finance, who has recently conducted a survey which found that a third of Brits take out the first loan they receive a quote for.

The research also found that over £1.5 billion will be borrowed on personal loans this spring to consolidate other debts.

Over a third of personal loans are to consolidate debts

The Sainsbury’s Finance research estimates that up to 139,000 personal loans could be taken to consolidate debt in the first three months of 2011, with a combined value of £1.55 billion.  This equates to just over one third (35 per cent) of the value of personal loans taken out in the first quarter.

Steven Baillie, Head of Loans at Sainsbury’s Finance, said: “Taking out a loan to consolidate disparate debts from previous loans or credit cards can save a significant amount of money in terms of monthly outgoings, especially if you have debt with store credit cards which can have extremely high APRs.”

One in three don’t compare personal loan rates

The survey also found that one in three Brits does not take the time to shop around to find the best personal loan rate.  Rather than undertaking some research to find the most competitive personal loan, over thirty percent of Brits simple take out the first loan they receive a quote for.

Mr Baillie continued: “This year, as much as £5.8 billion could be taken out in personal loans for debt consolidation purposes, and given that the difference between a market leading rate like ours and rates available on the high street could be as much as 19 per cent APR, choosing a non-competitive rate could cost you hundreds of pounds in extra interest repayments.” 

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