The Money Pages, January 22nd 2015: Borrowing pricier in the North than in the South
Borrowers in the North of England are paying £580 more on average for loans than people in the South, new data from Freedom Finance reveals.
As economic conditions across the country vary, annual percentage rates tend to be higher in northern regions. So, for average-size loans paid back for the standard period of five years borrowers in the North would receive rates that are 2 per cent higher than in the South.
“The lending market across the whole UK has opened up and the conditions have become more favourable. The problem for borrowers all over the UK is that the top headline rates we see advertised are only available to the select few with almost perfect credit scores. Other borrowers will instead receive a more varied APR based on their own personal circumstances, including their borrowing history and economic stability. For borrowers in the South, the first to feel the recovery, the APR rates available are decreasing, but a slightly slower recovery in the North is making northern loans more expensive,” Nicola Georgiou, managing director of Freedom Finance, explains.
The highest rates are offered to borrowers in the North West (17.9 per cent), while people in the South East are getting the lowest APRs, of 15.9 per cent.
While APRs in the North West are the highest, the likelihood of a loan rejection is the lowest, Freedom Finance’s analysis of 41,311 loan applications showed.
The biggest proportion of loan rejections is in London.
In a UK comparison, borrowers in Scotland have the biggest chance to get a loan approval, while the highest APR rates are offered in Northern Ireland.
However, no matter what the figures show, there are a lot of things borrowers could do to receive the best possible offer, according to Georgiou.
“Simple moves like registering to vote, taking out a mobile phone contract rather than pay-as-you-go or staying well away from your credit limit on cards can have a positive impact on your profile. ‘Soft search’ comparison sites are also a valuable tool to help you find the most suitable product, based on your individual credit record, and without making the situation worse,” he advises.