Personal loan quote

shop around if you want to drive a bargain with your personal loan

RECRUITMENT consultant Mike Harrison is a keen salmon fisherman and enjoys his regular trips to the River Eden where he joins Carlisle Anglers for weekends away.

But his little escapes wouldn't be possible without an Intelligent Finance personal loan which helped him buy his Peugeot 206.

He admits to not being brilliant with money, but he did shop around to make sure he didn't hook an old trout of a loan when he needed to buy a car.

Intelligent Finance's packages are among the best buys, and the Edinburgh-based internet bank cut its rates again last week. For a limited period, it will offer five-year loans from just 6.9 annual percentage rate (APR) until the end of September 2003 for borrowings bigger than (pounds) 10,000. The new deal takes effect from August 5.

Nearly half of all personal loans are taken out to finance car purchases, with a big surge in borrowing each year in preparation for the new September car registrations.

Yet, according to research, 54% of car buyers fail to shop around and merely turn to their existing bank to provide them with a personal loan, leaving them paying (pounds) 1 billion more than they need to in interest payments. Harrison, from Edinburgh, did his homework though, and was staggered by the difference in monthly repayments.

He said: "I borrowed (pounds) 8000, but over the life of the loan I could have ended up paying something like (pounds) 700 more depending on which bank I used. To me that's a lot of money."

He also said no to Intelligent Finance's offer of insurance to protect the loan, which keeps the payment lower still. The Consumers' Association has warned borrowers to be wary about expensive repayment insurance.

CA spokesman Mike Naylor says: "Insurance can be useful if it gives people the peace of mind they need. But many banks include the insurance quote when they tell you how much the repayments will be, even when you haven't asked for it. Customers do not always realise this. A bank cannot force you to take out insurance, but many do give the impression that if you don't take the insurance they won't give you the loan. They are not allowed to do this."