Switching loan provider mid-term could save you money

A recent report has shown that many consumers with unsecured personal loans could actually save money by switching their loan provider mid-way through the loan term.

However, the research also shows that many people fail to do this because they are under the impression that they will have to pay hefty fees or in some cases do not think that the savings are worth the hassle.

Around 30% of those with unsecured personal loans said that the savings that could be made were not worth bothering with in a recent survey.

A further 20% thought that switching loan providers was simply too much hassle, and didn’t want to bother with it. Around 6% of those with unsecured personal loans were not even aware that they could switch.

Experts state that around a quarter of unsecured loan providers do not charge any penalty if the borrower switches to another provider mi-term, and around two thirds of these lenders only charge one month’s interest, which works out at under £40 even for a loan of £8000.

A number of lenders have started to lower the rates on their unsecured loans following the December base rate cut, so some borrowers could really benefit from switching according to industry professionals.