Borrowers May Be Better Off Taking Out Larger Loans

Fri, 21 May 2010

A new report from the Daily Express offers Brits advice on the ‘straightforward steps’ they should take prior to taking out a personal loan . The newspaper cites research published in December 2009 by consumer and market researchers Mintel which revealed that 880,000 UK consumers plan to take out a loan during 2010.

Given the widespread prominence of this type of credit, the Daily Express has published a series of guidelines aimed at helping consumers to choose the right type of loan . Indeed, though banks and lenders typically compete on the advertised interest rates charged on loans, the Daily Express is advising borrowers to look at the Total Amount Repayable rather than only the interest rate, as this figure includes charges which are not always obvious, such as loan fees and charges.

Controversially, the newspaper also suggested that borrowers could be better off borrowing more money than they require, as the repayments on larger loans are typically lower, helping to make the loan more affordable every month. The report also advises borrowers to work out their monthly income and expenditure before considering how much they need to borrow.
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