press release

Press Release - 05/08/04

HIGH STREET BANKS RIPPING OFF CUSTOMERS ON PERSONAL LOANS - BUT STILL DOMINATE THE MARKET

AS demand for personal loans continues to grow, new research from personal finance data analysts Moneynet.co.uk shows that High Street banks - which have around 80 per cent of the market* - are short changing their customers by charging uncompetitive rates.

And with today's 0.25 per cent Bank of England base rate rise - which will affect millions of borrowers on variable rate loans - Moneynet.co.uk chief executive Richard Brown says it's crucial for borrowers to look around for the best deals, or risk overpaying by hundreds of pounds over a typical three year loan period.

"Demand for personal loans peaks at this time of year as people look for cost effective ways to help finance holidays - and of course there are rising numbers of those who want to consolidate more expensive credit card borrowings run up on summer breaks," said Richard Brown.

"But whatever the reason for borrowing, our new research shows that the very best deals on the market are offered not by the High Street banks (see table below) - the first port of call for the vast majority of applicants - but lesser known lenders such Liverpool Victoria friendly society and British Gas." Another key message to those taking out a personal loan is to ensure it is on a fixed rate with no redemption penalties, adds Brown.

"Today's base rate rise, with the promise of more to come demonstrates that personal loan borrowers saddled with variable rate deals are just as vulnerable as mortgage borrowers not in a fixed arrangement. In a rising interest rate environment a borrower could become seriously out of pocket."

One of the worst deals on the High Street is offered by HSBC: the lender charges 13.9 per cent APR on a £5,000 loan repayable over 3 years. Monthly repayments work out to £168.68 without insurance.

Yet at the other end of the scale the cheapest lender, Northern Rock, charges just 5.8 per cent APR, giving repayments of £151, a difference of several hundred pounds over the life of the loan.

" Institute of Credit Management data, July 2004

Tables based on a loan of £5,000 over 3 years

FIVE OF THE BEST

	Typical APR	Monthly Payment	Total Repaid	Rate Type	Early Redemption Penalty
Northern Rock	5.8%	£151.32	£5447.52	Fixed	None
Goldfish	5.9%	£151.54	£5455.44	Fixed	None
Liverpool Victoria	6.0%	£151.75	£5463.00	Fixed	None
British Gas	6.2%	£152.18	£5478.48	Fixed	2 months
Nationwide	6.7%	£153.25	£5517.00	Fixed	None

FIVE OF THE WORST

	Typical APR	Monthly Payment	Total Repaid	Rate Type	Early Redemption Penalty
HSBC	13.9%	£168.68	£6072.48	Fixed	2 months
Barclays	9.9%	£160.11	£5763.96	Fixed	None
Halifax	9.9%	£160.11	£5763.96	Fixed	2 months
Lloyds TSB	8.9%	£157.97	£5686.92	Fixed	60 days
NatWest	8.9%	£157.97	£5686.92	Fixed	2 months

PRESS ENQUIRIES

Richard Brown, Chief Executive, 0208 313 9030

David Andrews/Cathy Tully, David Andrews Media Ltd 07941 255855 / 01273 774109 / 07747196854

Consumer enquiries: info@moneynet.co.uk / www.moneynet.co.uk

Moneynet.co.uk is the UK's longest established online personal finance research and data analyst company. The company offers consumers a choice of thousands of low cost financial services products. From mortgages, personal loans to motor, home and medical insurance, credit cards, savings accounts and best buy fixed rate products, Moneynet is one of the most comprehensive online services of its kind in the UK. Founded by chief executive Richard Brown, the Moneynet brand is destined to become one of the UK's major players in consumer finance products.

A DAVID ANDREWS MEDIA LTD - RELEASE FEBRUARY 2005