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Shopping For Best Personal Loan Products 'Pays Dividends'

Aug 18, 2007
Taking the time to find the most competitive financial products including personal loans available could save consumers thousands of pounds, it has been revealed.

According to research carried out by Moneyextra, choosing the right mortgage can save up to 3,132 pounds, a figure which could help many homeowners pay off secured loans quicker.

Senior editor Robin Amlot said: "Getting your mortgage right is the key financial decision in terms of financial efficiency.

"The potential savings on your mortgage account for almost 70 per cent of the total savings to be made."

These findings from Moneyextra come despite mortgage rates rising over the last three months, which consequently has seen more homeowners struggle to make mortgage repayments.

Overall, the financial services firm indicated that by replacing some of the worst financial products available for more competitively-priced deals, Britons could save a total of 4,477 pounds - an increase of 150 pounds from the same survey carried out available three months ago.

However, the study indicated that savings rates on personal loans have fallen since March.

For a 9,000 pounds loan taken out over a 60-month period the highest savings on offer was 279 pounds a year down from the previous survey which indicated a peak saving of 386 pounds.

The fall was attributed to a "narrowing" of interest rates from the best and worst products, while rates on personal loans in general are said to remain "highly competitive".

Meanwhile, the financial services firm also revealed that for those looking to put 5,000 pounds into an instant access savings account, consumers could earn 280 pounds if they choose the best deal, compared to the 25 pounds being offered by the most uncompetitive supplier.

Choosing a leading cash individual savings account was reported to earn consumers some 62 pounds and 70 pence more in interest.

"Shopping around for the right savings products can also pay dividends," Mr Amlot added.

The findings also revealed that picking a competitive current account could generate an extra 64 pounds, with the right term assurance policy potentially saving up to 135 pounds every year.

Earlier this week, it was suggested that those homeowners wishing to fix their monthly secured loan repayments should look to act as soon as possible.

According to moneysupermarket, a number of lenders are beginning to increase interest rates on their fixed-rate products, following the Bank of England's monetary policy committee (MPC) decision to raise the base rate to 5.5 per cent last month.

Head of mortgages Louise Cuming said: "Borrowers needing the stability of a fixed-rate product should reserve their next deal now if their current mortgage term is set to end soon."

She added that although fixed-rate products "have been looking pretty good", the moneysupermarket representative warned that "they appear to be going up - and fast".

The expert also pointed out that as lenders continue to increase the costs of fixed-rate deals, the financial industry has predicted that the MPC is likely to increase interest rates when it holds its next monthly meeting - which is scheduled to take place on July 5th - a move which could well further pressurise consumers into making repayments on secured loans.
About the Author
Abbi Rouse is the Editor in Chief for Essentially Home Loans where visitors can apply for cheap loans online. We also specialise in debt consolidation loans. Visit our site today http://www.essentiallyhomeloans.co.uk
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