There is a whole host of reasons why a person may opt to get a loan, however this type of borrowing will see the borrowers need to pay interest. The amount a person repays will come down to factors such as the length of time to repay the loan and the loan rates.
The financial journalist said: “Now that isn’t a clarion call to get a loan.
“Don’t do it unless it’s planned, needed, budgeted for and affordable – even then minimise the amount and repay as quickly as possible.
“There’s a new cheapest for larger borrowing (£7,500 to £15,000) with Santander-owned Cahoot at just 2.8 percent rep APR – that’s £40 cheaper than the previous best, and more than £1,000 cheaper than some high street banks’ loans for £15,000.
“For £5,000 to £7,5000 Admiral and Zopa are 3.4 percent rep APR.
“For £3,000 to £4,999 Admiral again is cheapest at 8.2 percent rep APR.”
Despite these offers, Mr Lewis pointed out that it may be that some people are not able to enjoy these advertised rates.
“But remember this is only a ‘representative APR’ which means only 51 percent of those accepted get the advertised rate – others can be charged much, much more,” he explained.
“Yet you’re usually only told the rate after application, so once accepted, ALWAYS check it.”
What does the Money Saving Expert founder suggest doing?
Mr Lewis said: “And use a loan eligibility tool either from the firm or for a wider range a comparison site, e.g. Martin’s ‘loans eligibility calculator’ first, which will tell you your chance of getting a loan, but not the specific APR you’ll get.
“Plus always remember to follow the Golden Rules: 1) Minimise the amount you borrow and repay as quickly as possible and 2) Pay on time (preferably by direct debit) or you may get a charge and a missed payment on your credit report.”
Yesterday, Mr Lewis addressed mortgage rates, as he said that they too had hit “rock bottom”.
Speaking on Good Morning Britain, Mr Lewis said: “Mortgage rates are at rock bottom right now.
“Let’s call this the silver-lining of economic uncertainty.
“What’s going on in the UK and the world right now means long-term predictions of interest rates have dropped and those are the ones that mortgage rates are set on.”
Rather than recommending specific mortgages but instead giving a totem for the deals currently available on the market.
“We’ve got two-year fixes at 1.05 percent with Halifax,” he continued. “Five year fixes: 1.4 percent with Skipton and TSB, and a two-year tracker with Halifax under one percent.
“[It’s the] first time we’ve seen rates like that since 2017.”