Why Do So Many Borrowers Fail To Shop Around?
| Related: | Personal Finance•Money•Loans |
In a recent report conducted by Sainsbury's Finance it was reported that around 33 per cent of people accepted the first loan quote they received, while 54 per cent of people took out a loan from their current account provider
Unfortunately this expensive apathy is costing them hundreds of pounds in extra interest, with borrowers paying an average of £390 more for a £5,000 loan over three years from a current account provider, compared with the market leading rate, although in some cases the difference was more than £1,400. The research found that older people were most likely to go straight to their current account provider, with 76 per cent of the over 65s doing this, compared with just 40 per cent of those aged between 25 and 34.
I must say that I find this rather surprising given the increase in number and popularity of price comparison websites. It never ceases to surprise me just how many people wiht internet access fail to make the time to shop around online.Do you also wish that your relatives and friends would learn the art of shopping around for the best loan or generally any financial product?
Responses (4)
I understand what you're saying, but sometimes trust and good customer service can be worth as much as the savings to be made.
Most people tend to stick to who they bank with probably for the conveniance of everything in one place and knowing the people who work there.
As regards the over 65s, many of those I know only use the internet for basic things eg emailing and generally keeping in touch with friends and family, however, that is rapidly changing! Many also go to their current account provider as they learned to manage their money in the days when loyalty to a bank meant something. That too is changing, as they are becoming 'wised up!' My own late mother didn't even know how to get cash out of an ATM!
I guess one problem with the internet is that you have to know a site exists to go to it. You don't spot it while walking down the high street. OK, so I guess you can put some search terms into google/bing/yahoo/etc. but getting the terms right can be an art form. Plus when you do find a site, there are so many warnings about scams, bogus sites etc. that I bet plenty of people will be worried about putting the sort of personal details you need to supply a loan rate comparison engine.
So I guess it boils down to awareness, experience and trust - all things lacking for the elderly where the internet is concerned!
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