Dodge This £90 Loan Trick

Friday Jun 02, 2007

I was quite excited last week when the EU announced that it was backing new personal loan rules. The main aim is to break open the €800 billion market, so that it's easier to sell loans in other EU countries.

To do this, it's standardising the information that lenders must give to consumers. All adverts and documentation must contain the same information. However, I suspect that the UK won't see a great deal more choice of lenders, because we use pounds, not euros, which is inconvenient for European businesses.

Still, if the EU gets it right, perhaps it will clear up one little problem. It's looking at standardising the way that interest rates -- the Annual Percentage Rate (APR) -- is calculated. In the UK it's already supposed to be standardised, but it can currently be manipulated by lenders in several ways, making some loans seem cheaper than they really are.

Source: http://news.sky.com/