Bank Loans
Borrowing more could cost less, says study

Borrowing more could cost less, according to finance specialist Find. Top tier interest rates are usually levied on smaller loans, so it is worth finding out which borrowing thresholds will yield smaller rates, the company said.



For example, many lenders charge significantly more for loans of less that £5,000. According to Find, a loan of £4,950 from Direct Line Personal Loans would cost customers £6,911 over five years, when a loan of £5,000 would cost £5,836 over the same period - yielding a saving of £1,075.

Kate Marsden, Marketing Director of Find.co.uk, said: "Borrowers should take care when choosing the size of loan they want, as a little effort in researching the interest rates charged on different tier levels could save them a considerable amount of money."

She added: "Borrowers who are not able to research what's on offer, could go for the safe option of choosing one of the providers who charge a standard interest rate across their borrowing range, provided that their rates are competitive."

Find also pointed out that taking out payment protection makes the disparity between interest rates for smaller and larger loans even more pronounced.

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