Posted 4th April 2008

In the current economic climate, with the cost of some tenant loans increasing and daily mail-shots hitting the doormat with offers, it is very tempting to think about switching providers, however, before doing so please read the following hints and tips regarding switching loan companies and what you need to know;

First and foremost always seek independent and impartial financial advice.
Does your current loan company impose early repayment penalties, if so, the cost of these may far outweigh the cheaper interest rate offered by the new lender.
The Rule of 78 hidden penalties. These apply to loans taken out prior to June 2005 and basically means that interest on the loan is not spread evenly across the repayment period of the loan. Fortunately this has now been outlawed.
If you have taken out PPI insurance, there maybe clauses applying regarding cancellation.
Try to calculate the true cost of switching the loan which means understanding what the cost of the new loan is and the cost of the cancelling the old one.
The act of applying for another tenant loan will mean another entry in your credit history record.

For more information on credit reports, visit the Credit History Check page.

Please Note! YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT. ALL SECURED OR UNSECURED LOANS ARE SUBJECT TO STATUS. SECURED LOANS ARE SECURED ON PROPERTY.

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