![]() ![]() ![]() ![]() This clearly indicates that rather than be transparent with consumers, many in the industry are instead keeping consumers in the dark over key product features. The research also found that one in 10 consumers with a loan did not feel their provider was clear enough with them about the interest rate they would be offered – the most basic, critical aspect of any loan product. Recent research conducted by YouGov found that 39% of consumers who have taken out a personal loan in the past five years were unsure if their provider offered them a repayment holiday, while 27% were unsure if they could make overpayments, and 27% were unsure if there was an Early Repayment Charge for paying off the loan early. “In fact, we think that there are at least five key features and charges that customers need to be aware of before they request a quote or apply for a loan,” the bank adds.īut what is incredibly telling is just how few consumers feel they have this information before making a decision on a personal loan. Many providers hide important product features from consumers Consumers need to be given the tools to be able to work out which product is right for them.“At face value, loans seem like straightforward financial products – in fact 78% of the people we surveyed felt this was the case – but we believe that there is a false transparency in the personal loans market where key product features, fees and charges are often deliberately obscured from consumers,” TSB says. More worrying still, is the fact that so few consumers are aware that the industry is doing this.Ī recent survey conducted by YouGov for TSB found that 40% of consumers who have taken out a personal loan in the past five years have no idea whether or not they received a hard credit check when they asked for a quote. “We believe that this practice of preventing and punishing consumers for shopping around could be costing them as much as £400m each year,” the TSB report says. By behaving in this way, almost two-thirds of open market providers are effectively punishing consumers for shopping around.Ĭompare this behaviour to nearly any other industry – when a customer shops around for a new car or washing machine, they will usually get the product they want at the lowest possible price in the loans market, this same behaviour could paradoxically see a consumer getting a more expensive deal, or potentially no deal at all. Not only could this result in a customer having to pay a higher price for lending, it could also increase the probability that a customer will be declined. ![]()
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