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Just one of the cheapest personal loan providers as borrowers were urged to shop around

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Just one of the cheapest personal loan providers as borrowers were urged to shop around


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ZOPA is ranked among the cheapest personal loans on the market today, but there are warnings that borrowers are unaware of how low the rates can be.

Research by comparison website Compare the Market found that the average annual percentage rate of many personal loans, including the P2P credit giant, is around 2.9 percent.

However, a poll of more than 2,000 adults by Compare the Market found that a quarter believe the average percentage is between 11 and 50 percent.

The website suggested that borrowers may also confuse personal loans with payday loans, which often have a representative APR of 1,266 percent.

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It claimed that 20 percent believe that personal loans are too expensive to pay back.

Despite the competitive interest rates available, 58 percent admitted they had no idea what their credit score was and 82 percent said they had never researched how much they could borrow through an online soft checker before applying for a personal loan.

“Personal loans are a sensible solution for many people, especially if you want to borrow a larger amount for a one-time purchase or project,” said John Crossley, director of money at Compare the Market.

“For borrowers who want the discipline to make a fixed monthly repayment, personal loans may be preferable to a credit card where you have the flexibility to pay whatever you want each month as long as it’s above the minimum amount. In many cases, personal loans also have a lower interest rate than credit cards.

read more: Can P2P Lenders Compete in the Personal Loan Market?

Read more: Zopa maintains credit policy as it reviews standard expectations

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“When applying for a loan, it’s important to take the time to understand how likely you are to be accepted.

“Repeated credit checks can damage your credit score, but doing a soft check online will give you an idea of ​​how much you can borrow responsibly without putting a black mark on your name.

“Interest rates can vary significantly between providers, so it’s always a good idea to shop around for the most competitive loan that offers the best deal.”

Read more: Zopa sells batch of defaulted loans to boost investor returns

The post Just one of the cheapest personal loan providers as borrowers were urged to shop around appeared first on Notesradar.

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