Consumers could save more than €1,000 on their bank loans by shopping around, the Financial Regulator revealed today.
With banking restrictions easing and more people chasing better deals, the watchdog showed savings could stretch from €80 to €1,200.
Consumer director Mary O'Dea insisted money was there to be saved on personal loans if people checked all the options available.
Consumer director Mary O'Dea
The Regulator noted that a €7,000 variable-rate loan over three years could cost anywhere between €830 and €1,160.
Ms O'Dea warned that if a customer had poor credit history or many financial commitments, lending choices could be limited.
The loan could cost more than €2,790 with one lender, she said. "Whatever the cost of your loan, the most important thing is whether you can repay it over the term," Ms O'Dea said.
"Think about whether you would be better off saving the money instead. Waiting until you can afford what you want is painless compared with finding yourself trapped with a loan you cannot afford to repay."
The banking survey examined the cost of three loans across 14 different lending houses, and for the first time included the cost of loans from Credit Unions.
The Regulator revealed the cost of credit varied from bank to bank. The first loan, €3,500 over one year, cost as little as €138 for EBS clients and €141 for Hibernian customers.
But repayment rates rocketed across the other lending houses, with costs as much as €587 from Citi Financial, €227 from National Irish Bank and Ulster Bank. Permanent TSB, Bank of Ireland and Tesco's costs were just over €200.
Deals from the Credit Union came out on top with the €3,500 loan costing from €127 to €230.
The second loan amount of €7,000 threw up further startling differences.
EBS offers the finance for as little as €804, the cheapest deal, while Hibernian offers the nearest competition at a cost of €829. Again, Citi Financial comes off the worst with repayment rates driving costs up to €2,798.
Bank of Ireland offers the money for between €1,139 to €1,179, while Ulster Bank's costs run from €994 to €1,161.
The final loan is €13,500 offered over five years and again Citi Financial is the dearest with costs running to €5,334. One Direct's deal cost €3,517.
The cheapest deals come from EBS at €2,618, NIB €2,646 and Hibernian at €2,712. That amount at a variable interest rate from the Ulster Bank will cost €3,711, while the same amount at a fixed rate from Bank of Ireland will cost €3,873.
Ulster Bank, Hibernian and One Direct are the only banks to charge a set up or arrangement fee when the loan is offered.
Hibernian and One Direct ask for a fixed rate of €72 across all loan amounts, but Ulster Bank varies its rates anywhere from €35 to €135.
PA