Alliance & Leicester Personal Loans have warned that splurging on your dream kitchen could prove to be a costly nightmare. It says that since 2000, Britons have wasted a might £1.2 billion on 'uneconomical' deals.
Recent research indicates that more than 20 million Britons are looking to update their kitchens in the near future. Around 28 percent of them will take out personal loans for the same, but many kitchen dealers who finance these deals charge interest rates, which might run into double figures making this a very costly venture. Ash Mukadam, personal loans manager at Alliance & Leicester, says, "The devil is in the detail for those taking hellishly expensive kitchen dealer finance, which will probably end up burning a large hole in their pockets. As celebrity chefs and 'Food TV' make cooking such a hot topic, it is no surprise that people want to update their kitchens and borrow to meet the cost. What is surprising is that people do not appear to put as much effort into looking for a good rate of finance as they put into the style of their cupboards or the colour of their worktops."
The bank added that the average interest charged by retailers for finance on new kitchens was 15.2 per cent while the market value was less than half this amount. If consumers opt to pay an interest of 15.2 percent over five years, they would end up paying £2,425 in interest, which was more than double the amount payable if they chose a personal loan offered by Alliance & Leicester at 6.4 per cent.
"With the approaching Bank Holiday weekend being a time people sign up to home improvement deals, it is extremely important that they shop around for finance or risk putting their finances in expensive limbo for the duration of the loan," Mr. Mukadam concluded.
Posted
on : Sun, 29 May 2005 09:05 GMT | Loans News
By : Salim Patel
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