Consumers looking to take out a loan would pay a higher price in the North than in the South of England, new research from Freedom Finance shows.
Reviewing 41,311 loan applications, Freedon Finance found that borrowers in the North are paying an average of £580 more for a loan than in the South.
The annual percentage rates offered by lenders in the North are by 2 per cent higher on average as compared to the South.
Borrowers in the North West received the highest average APRs in England, of 17.9 per cent, but they also had the highest chance of approval, with loan acceptance rates being the highest in this region (74.8 per cent).
People living in London were the most likely to get a rejection from their lender, with rejection rates in England’s wealthiest region standing at 71.5 per cent.
The South East of England had the lowest average APR for loans, at 15.9 per cent.
In a nationwide comparison, acceptance rates for borrowers were highest in Scotland, at 76.7 per cent, and Northern Ireland had the highest average APR, at 29.9 per cent.
Nicola Georgiou, managing director of Freedom Finance, commented:
“The lending market across the whole UK has opened up and the conditions have become more favourable. The problem for borrowers all over the UK is that the top headline rates we see advertised are only available to the select few with almost perfect credit scores. Other borrowers will instead receive a more varied APR based on their own personal circumstances, including their borrowing history and economic stability. For borrowers in the South, the first to feel the recovery, the APR rates available are decreasing, but a slightly slower recovery in the North is making northern loans more expensive.”
The economic differences between North and South only play a limited role, and plenty can be done to improve your own credit score. Simple moves like registering to vote, taking out a mobile phone contract rather than pay-as-you-go or staying well away from your credit limit on cards can have a positive impact on your profile. ‘Soft search’ comparison sites are also a valuable tool to help you find the most suitable product, based on your individual credit record, and without making the situation worse.”
