Small print warning over personal loans

Fri, 08 Dec 2006

Consumers have been advised to "read the small print" before opting for personal loans.

Stuart Glendinning, managing director at Moneysupermarket.com, made the remarks in the wake of Cahoot's decision to raise the rate of interest on its personal loans.

Cahoot, which is owned by Abbey, has opted to raise the rate on its personal loans from 9.4 to 14.9 per cent - a 5.5 per cent hike.

These changes to the personal loans will directly impact upon consumers, Mr Glendinning warned, as they are flexible rate, rather than fixed-rate products.

"Existing customers faced with this sharp rate rise can of course shop around for a new loan – though very few providers offer comparable flexible rate products," he remarked.

The expert also noted that while parent company Abbey has the most competitive fixed-rate personal loans available, at 5.8 per cent, 52 per cent of applicants in a recent survey were not offered this deal.

Moneysupermarket.com compares more than 400 personal loans on its website, in addition to a range of other financial services.


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