DON’T GET STUNG BY LOAN FEES
Millions of borrowers are angry they have been hit with unexpected fees on loans.
And these ‘hidden’ charges have raked in a hefty £164million for financial firms in just five years.
One in four people say they’ve been hit with an additional charge on a loan taken out over the past five years.
Fees for same-day money, followed by charges for missed or late payments, are the most likely way people get caught out. Others have had to cough up early repayment charges when trying to be sensible and clear debt quicker.
Research from LiveLend, a new loans firm, reveals four out of five people are angry as they feel these charges were not made clear when they took out the credit.
Around nine in 10 providers charge these additional fees and the amounts vary widely.
Early repayment fees, charged by two-thirds of the market, range between 28 and 58 days’ interest. On a £10,000 loan at 25% APR that could set you back between £172 and £358.
Almost nine out of 10 people think loan firms should be more transparent and upfront about all potential fees on loans and shouldn’t bury the details in the small print.
Before going ahead and taking out a loan make sure you check exactly what it will cost in total over the term.
If you think you may be able to repay the debt sooner, find out if you’ll get slapped with an early repayment charge.
Set up a standing order for repayments so they are made automatically and you don’t risk forgetting to pay on time each month.
And don’t end up filling the lender’s coffers with an extra penny above what you have to pay in agreed interest.