Kitchen Loans
Unsurprisingly a great many of the
unsecured personal loans taken out in the UK go
towards home improvements, to raise the value of your property and
make your living space a more comfortable and inviting one. Many
people will chose to upgrade their kitchen; again
this is one of the home improvements that will add a fair amount
to the value of your property. If the popularity of TV cooking shows
is anything to go by, we like to spend a lot of time in our kitchens
so its understandable we want it to be a modern and welcoming place.
Likely this bank holiday weekend even more consumers will spend
some time shopping for a new kitchen and many will be tempted to
take out a personal loan at the time of purchase.
However research by the Alliance
and Leicester has revealed that, as with car
loans, many consumers are paying over the odds for their new
kitchen when they take out a loan from the kitchen dealer itself.
Interest on a personal loan for a new kitchen from the kitchen dealer
can be on average 15.2%. Quite steep, especially when you consider
a new kitchen can cost around £6,000, well
in the realms of most loan offers from major banks, building societies
and internet financiers which will offer deals with a APR half that.
One in four British consumers who
have or plan to install a new kitchen will take out personal finance
to fund the endeavour. Of these 800,000 will go for dealership finance
at extremely high APR’s. The financial difference isn’t
small either, by taking out a personal loan at the dealership you
could end up spending £1,422 more than you need too. That
money could be well invested elsewhere, maybe in even more kitchen
improvements such as upgrading appliances, after all if you have
a new modern kitchen it’s satisfying to have modern appliances
as well. But even if you don’t want to invest anymore in your
kitchen, the money could be spent on other things, or simply having
lower loan repayments or paying off your loan quicker would be a
boon to most consumers.
It shouldn’t be too hard
to find a great deal on a personal loan for a kitchen, after all
for the amount of money involved most lenders are already offering
good rates. Alliance and Leicester themselves offer
loans from 6.4% over £5,000 and to name examples from all
aspects of the personal loan market, lenders such as Tesco,
Cahoot and Bank
of Scotland all offer good rates too.
Taking out a personal loan
to fund a new kitchen in itself isn’t bad, B&Q recently
stated that it could add significantly to the value of your home
and be financially worthwhile in the long run. However paying over
the odds is inadvisable, you might get a great deal on a new kitchen
this bank holiday weekend but higher loan repayments could render
that less rewarding. Shopping around for a personal loan with a
great APR is probably just as worthwhile as making sure you chose
a kitchen scheme that your happy with.
29/5//05
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