Brits confused by early repayment fees
Your Money, 18 Jul 2014
Less than half of Brits know that banks penalise consumers for repaying personal loans ahead of schedule, according to new research.
Amigo Loans also found a discrepancy between how much interest consumers expect to pay and what they are actually charged. A quarter of Brits believe the average APR on a bank loan is between six and 10 per cent and one in ten believe it is between one and five per cent.
Based on a £2,500 bank loan taken out over 36 months, Halifax offered an interest rate of 29.9 per cent, RBS 22.9 per cent and Santander 20.3 per cent. M&S Bank, First Direct, Sainsbury’s Bank and Nationwide all offered rates below 20 per cent.
James Benamor, CEO of Amigo Loans, said:
“Banks are lying to their customers and duping them by advertising rates that only a few people will actually get. On top of this they load on hidden fees, charges and hard-sell ancillary products to boost their profits. While many people are denied a bank loan by a cut-throat credit score, those who are successful are ultimately borrowing at much higher rates than expected.”
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