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Did you know that switching lenders can save you money? Just
because you agreed to a loan in the past, doesn’t mean
that you have to stick with it forever. Most people stick with
the same lender for years and years. Often without even checking
if better rates and terms are available elsewhere. Reasons
for staying with their lender include:
- Easier
- Not aware of alternatives
- Trust their current lender
- Fear penalties for switching lenders
Study after study shows that if consumers stay up to date
on alternatives, they can save an average of almost £2000
per year. This is a good reason to shop around. Also, as consumers
demand more and more from lenders, competition increases and
terms and rates improve.
If you are curious as to which loans are worth refinancing,
the answer is that almost all of them are. From credit cards,
to personal loans, to mortgages, shopping around is likely
to get you substantially better rates thus saving you thousands
of pounds. Recent polls show that most consumers are willing
to consider switching credit card issuers, consolidate their
debt with a personal loan, and move, which means a new mortgage,
within the next 12 months. All of this translates into considerable
refinancing.
Take the following examples as illustrations:
- Transferring a credit card balance from 20% to 0% for 12
months.
- Consolidating credit card and auto finance debt to a lower
rate personal loan over three years.
- Refinancing your mortgage to take advantage of better rates.
While many people simply do not bother to take the necessary
steps, making these changes can save you tens of thousands
of pounds in interest over your lifetime.
The most basic advice anyone can offer you is always shop
around. There are huge variations in terms and rates, and only
by shopping around will you find them. If you have a good credit
rating and steady income, lenders will be lining up to give
you credit, so don’t be afraid to demand good terms.
The chances are you are going to repay them and they know this.
This is not to say that those with less than perfect credit
scores can’t save money. Deals are open to everyone who
is willing to shop around and find a better rate. Also, if
you are finding your current payments difficult, shopping around
makes all the more sense as lower payments will be easier for
you to keep up with.
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