Price comparison websites promote themselves as great places to find cheap deals but Moneysupermarket.com, the UK’s biggest comparison site, is advertising an unsecured personal loan with an eye-watering rate of 59.6%.
The Everyday Loans product is offered to those with poor credit histories — but even if you have a good credit history, Everyday Loans will charge you 37.3% interest to borrow £10,000 over five years.
That’s almost five times more expensive than the 7.4% interest charged by Which? Best Buy Asda. Eight other Best Buy loan providers, including Barclaycard and the Post Office currently offer rates below 8%.
Moneysupermarket.com also promotes a range of very expensive payday loans with interest rates of more than 1200%. With these deals, you are typically borrowing money for a month – so, for example, you might borrow £100 for 31 days but have to pay back £125 at the end of this period.
Price comparison websites
When Which? Money investigated three of the biggest price comparison websites in June, we found that in some cases you could get cheaper deals by going directly to lenders and insurers. We also found that some of the cheapest loans were not shown on all of the sites.
Which? money editor Martyn Hocking said: ‘Price comparison websites can save you time – and should save you money – but our research shows that you need to keep your wits about you when using them and visit several sites to get the best deals.’