Sainsbury’s Bank Finds Personal Loans Top Choice For Debt Consolidation
13 April 2005
The top reason for borrowing a personal loan this year is likely to be debt consolidation, Sainsbury’s Bank is predicting.
The bank expects about 1.4 million loans – almost one in three of all personal loans – will be taken out for this purpose, worth a collective £11.9 billion.
Buying a car will be the motivation that comes a close second, with Sainsbury’s Bank estimating that some 1.24 million personal loans worth around £9.92 billion will be taken out for this important investment.
Coming in third are home improvements, still an important expense for most British people – around 793,600 people will borrow a collective £6.35 billion to ensure their homes are in tip-top condition.
“When taking out a personal loan, you need to ensure that you shop around to find a competitive rate,” advises Rachel Bereton, loans manager at Sainsbury’s Bank.
“The difference in rates on a loan of £10,000 could be as high as 8.0 per cent APR which over five years could mean around £2,180 in excess interest repayments.”