When taking out loans ‘do your homework’

Every year approximately 6.5 million people take out a personal loan, according to leading financial advice site Fool.co.uk.

It is absolutely vital for one to carry out the required amount of research before embarking onto a loan, the advisor states.

Barclaycard’s offer of a £5,000 loan at a 5.9 per cent APR is one of the most popular of these loans.

With this deal, the borrower only ends up paying back approximately £5,459.04.

However, Direct Line also offers one of the more popular loans available, £5,000 at a 6.1 per cent APR, which means that one would pay back approximately 5,470.56.

For borrowing money over shorter periods of time, an overdraft or a zero per cent credit card may be a better deal, according to Fool.co.uk.

But for amounts in excess of a few thousand pounds, then a personal loan with a low rate of interest is no doubt the best tactic.

Earlier this week the monetary policy committee of the Bank of England decided to keep the base rate at 4.75 per cent.

© Adfero Ltd

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