Britons have access to the some of the cheapest personal loans in the world, according to new research from the British Bankers' Association (BBA).
In a report carried out by independent economic consultancy Oxera as part of the BBA's annual appraisal of the UK loans, credit card and current account market, it was found that Britons have access to some of the cheapest financial products in the world.
When compared to prices for loans in other countries - including Finland, Canada, Germany and Australia - UK personal loans have the cheapest Annual Percentage Rate (APR), Oxera found. The typical borrower seeking a two-year personal loan in Britain will pay an average six per cent, while consumers in Ireland are faced with APR charges of around 11 per cent and Americans pay just over ten per cent in interest each month.
"For most profiles, personal loans in the UK are cheaper than those in all the other countries covered in this study", the researchers stated, adding that Britons have access to "some of the lowest arrangement fees" and administration costs.
As well as having access to cheap loans, Britons are offered some of the more competitive credit card deals, although the study does suggest that higher demand for credit cards in the UK could be a reason for the cheaper deals offered by providers.
It was also revealed that the UK has a broader range of financial products on offer, with UK consumers able to access cheap loans, bad credit loans and overdrafts, while also using debit cards in other countries. These facilities are not always available for other nationalities, with consumers in Finland unable to access current accounts while on holiday and instant-access saving accounts are rarities in America.
The study noted that financial services firms in the UK give clearer advice to customers, presenting breakdowns of fees in a more transparent way than banks in the ten other countries included in the research. Information about fees is easier to obtain in the UK, Finland and the Netherlands than it is in any other country, with consumers in Germany, the USA and France facing the toughest task to find out about bank fees and interest charges.
"The international comparisons make it clear: banking is good news for the UK", commented BBA chief executive Angela Knight, who said that the financial services sector not only offers "value for money" but also helps to keep the economy afloat by offering jobs to several million people.
"Besides contributing 50 billion pounds to the economy and creating jobs for four million people, UK banks provide consumers with transparent, diverse services that are good value for money. These are services that consumers in many countries could only wish for", she concluded.
Last month, price comparison website Moneyextra recently advised borrowers to shop around for the best price on mortgages and personal loans. Seeking out cheap loans is a "key financial decision" and can help homeowners cut monthly costs and limit the amount of money paid in interest, said senior editor of the site Robin Amlot.
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