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Personal loan market becoming "easier"

The personal loan industry has become more consumer-friendly now that providers are required to be more transparent with insurance costs, it has been claimed.

An article by the Thrifty Scot has said that comparing loan deals is considerably "easier" for customers now that companies must show the full cost of loans in the APR, meaning that people are longer buying unnecessarily expensive protection insurance.

The website has produced a guide to taking out a personal loan that advises consumers to use this option if they wish to purchase a large item and spread the cost over a relatively long period of time - for a period of six months, a credit card may be more suitable.

Prospective borrowers are also told to expect the lender to run a credit check before proceeding with the application, with one of the UK's two main credit reference agencies, Experian or Equifax, providing this service.

Despite the several considerations which applicants must make, the article states, loans are fundamentally about giving an individual a financial opportunity: "A personal loan is for you to borrow money and do with as you wish."

Last week the Finance and Leasing Association said that consumer credit can act as a "leveller for society".

See how much you could borrow with a Lombard Direct personal loan.

03/07/2007 17:25:13

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