It's your Mortgage Day!
Half of consumers do not know rate of current loan – shopping around could offer more value.
More than half (53%) of consumers who have taken out a personal loan do not know what rate of interest they paid on the sum new research* from KBC Bank Ireland shows.
In responding to customer research KBC has launched a new personal loan product which offers customers a new lower rate of 7.49% APR with a KBC Current Account. KBC are now offering one of the best rates on the market and are encouraging customers to shop around. This new rate ensures KBC is now one of the most competitive loan providers in the retail banking market, offering the best rate for unsecured loans over €10,000. Other features include flexible repayment options between 12-60 months.
The survey found that while 53% of adults questioned had taken out three or more personal loans over their lifetime, men were more likely to borrow, with 33% having successfully applied for a loan five times or more. The majority of those surveyed (63%) said they currently have a personal loan, while 59% of respondents said they plan to apply for one in the near future.
Another 73% said they got the money into their bank account within three working days of submitting their application. KBC Bank Ireland said that all customers will receive a decision on their loan application within 24 hours, with instant decisions possible in at least half of all customer cases. Upon offer, KBC will issue the loan contract immediately by email, and will accept signed loan agreements returned by email.
KBC’s research found that loans were primarily taken out to buy new (18%) or used cars (17%), or to carry out home improvements (25%), with women more likely (32%) to borrow for home renovations. Holidays (12%) and education (9%) were also popular reasons for borrowing. One in ten respondents said they had borrowed for refinancing reasons, rising to 16% of male respondents. Among those considering a personal loan in the near future, new (23%) and used (17%) car purchases, as well as home improvements (20%) are still the main reasons for borrowing.
Interestingly, among would be borrowers, education (16%) and weddings (5%) were more evident as reasons for borrowing, with refinancing the primary reason among just 6% of respondents. Just one in ten (11%) has never taken out a loan at any stage, with the figure almost doubling to 19% for those in the 18 to 29 year old age group.
Eddie Dillon, Director of Products, KBC Bank Ireland, said: “Our research shows that people borrow for a range of reasons, from buying a car to planning a wedding, to renovating their home. Whatever the reason, customers are looking for attractive rates, a hassle free application process, and quick approval times. KBC’s new personal loan product offers flexible repayment options and a simplified pricing structure – just two rates (below €10k and above €10k).Customers who also hold a KBC current account can also avail of a 1% discount, with rates as low as 7.49% APR. Our flexible repayment option means personal loan customers can opt to pay over any term up to 5 years. It all adds up to a better deal for borrowers at KBC. And with our fixed rate loans, customers know exactly what their monthly repayments will be.”
The KBC survey found 73% of customers who previously received a cash loan opted for a fixed interest rate and 27% for a variable rate, however 53% of those who had taken out a loan did not know what interest rate they paid. Almost two thirds of loan terms were for three years and under.
All those questioned had used online banking in the previous twelve months, with 75% banking online once a week or more. More than a third use the internet as their main loan application channel, and more than half still choose a local branch to apply in person “As a digital bank with a physical network, customers have the option of applying for a loan entirely online or in person at any of KBC’s 15 hubs in towns and cities across the country,” added Mr Dillon