British borrowers add £320 to the cost of major purchases from not shopping around for finance

  • Brits who don’t shop around for the best financial deals add £320 to the cost of major purchases (make that £520 if you’re a car buyer)
  • 'Impulsive budgeting' means borrowers spend less than 15 minutes considering their finance options and two thirds of people admit to going for the option closest to hand
  • Ikano Bank offers a simple solution to time strapped borrowers with its new low cost personal loan at 3.2% APR Representative

New research from Swedish challenger Ikano Bank shows Brits who don’t shop around for the best finance deals or competitive loans are adding an average of £320 to major purchases such as cars, home improvements, holidays & weddings.

Despite spending months researching these purchases, people are typically much more impulsive when it comes to budgeting and are spending less than 15 minutes researching how to pay for them. Additionally, more than two-thirds (68%) of people who borrow money for major purchases are not checking for better deals and instead choosing options that seem quicker, easier or closer to hand.

All this is costing borrowers money, particularly car buyers who are the worst hit as those who don’t shop around for the best finance deals are spending an average £514 extra. Car buyers are closely followed by:

  • 326,697 newlyweds who waste an extra £451 on money borrowed for their wedding;
  • 1.5 million home improvers who waste £375 on DIY repayments;
  • 701,112 people paid an extra £419 on debt consolidation;
  • 2.5 million holidaymakers who paid an extra £157.

 

Big Ticket purchase

Avg. amount paid for product

Total no. of people paying excess interest

Avg.

excess interest paid

What you could buy with the excess interest?

Car

£11,547

1,077,946

£520

Over 500 litres of petrol

Home improvements

£5,608

1,565,130

£375

25 pots of paint

Holiday

£2,074

2,511,414

£156

Nearly 40 tubs of Ben and Jerry’s ice cream (500ml)

Wedding

£6,294

326,697

£451

Over 50 bottles of wine

Debt consolidation

£8,724

701,112

£423

That’s money that can be going into a savings account

 

Ikano Bank is offering a simple solution for borrowers who are time strapped or overwhelmed by choice with the launch of their new personal unsecured loan. The bank’s Swedish heritage and straightforward approach means the new loan is simple to access, quick to apply for and low cost with a headline rate of 3.2% APR Representative (on loans from £7,500 - £15,000).

The bank gives borrowers an instant, personalised quote telling them what % APR they will get and exactly how much their monthly payments will be before they apply and without affecting their credit score.

Ikano Bank’s Head of UK Banking, Simon Ripton says:

“When it comes to finding suitable finance it’s important that people aren’t rushing to the point where they’re getting a terrible deal and that they’re not dazzled by the first or easiest options such as sticking with their own bank and wasting lots of money.

“Equally, we know that researching can be overwhelming, overcomplicated, or let’s face it, a bit boring and people want to get on with the fun stuff like choosing a car or planning a wedding.

“Our new personal loan is simple, low cost and can be applied for online in less than 10 minutes. Once approved, money is in the customer’s account the next working day.

Not everyone is able to get the best rate available, but whatever your credit rating doing your homework and shopping around will always pay off.”