Larger Loans Offer Advantages

Posted 2008-01-9

The size and tier of the loan people sign up for may save money, according to Defaqto, a financial services research company. 

 

Lower tier loans are often for smaller sums of money and charge the highest interest rates, and usually give the shortest amount of time for repayment. Borrowers may pay more money for less, especially when lenders have two tiers ranging from £1,000 to £5,000.

 

David Black, a principle consultant of banking for Defaqto, offered, “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.”

 

Larger loans often come with the convenience of longer repayment schedules and can save borrowers as much as £1,000. When borrowers are looking at loans, Defaqto advises them to “be on their toes” when dealing with larger tier rates, which may have the best competitive rates.

 

Defaqto commented that “credit cards reward disloyalty” since credit card users are often able to switch balances from old cards to newer ones, and for better interest rates. Taking out a loan could bring more stability to the financial plans of individuals who are accustomed to constantly switching credit cards for lower interest payments.

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