Thrifty Loans

New figures are emerging indicating that it may in fact be cheaper to borrow larger amounts when taking out certain personal loans.

In recent times it has become more expensive to take out a loan for sums less than £5,000 whereas the cost of loans over that amount has scarcely altered.

It would appear to be the case that loan firms are concentrating their efforts on the ‘big borrowing’ by keeping those rates competitive.

Sean Gardner, the Chief Executive of MoneyExpert.com (who conducted the research) says, “It really is the case for customers that bigger is better when it comes to personal loans. The more you borrow the better the deal you get. The less you borrow the more the lenders cash in.”

Since November 2006, the average annual percentage rate (APR) on a typical £1,000 loan has increased from 14.63% to 16.1%.

Personal loans of £2,500 have gone up from 14.13% to 15.41%, and those rates for a £3,000 have risen from 12.35% to 13.8%.

Looking at the exact same time frame, a £5,000 loan’s rates have on average dropped from 8.74% to 8.62%. The interest on the largest sums of personal loans is found to be sitting at 7.5%.

As with any financial undertaking the advice is always to shop around to find the best deal to suit your individual needs and situation.