Brits pay £9.3bn too much interest on borrowing each year

As the UK’s personal debt crisis continues to deepen, Zopa estimates that people in the UK are paying £9.3 billion p.a. too much interest on their unsecured borrowing.

Zopa - the world’s first marketplace where people meet to lend and borrow money, and a source for nearly two years now of the lowest interest rates for unsecured borrowing in the UK - today publishes its estimate of the extent to which Britons are being overcharged on their borrowing. By comparing the average interest rates offered on the Zopa marketplace to those across the UK as a whole, Zopa estimates that people in the UK are overpaying to the tune of £9.3 billion each year.

At the end of last year, on average, every adult in the UK had £4,611 of unsecured debt, spread across credit cards, store cards, personal loans, hire purchase arrangements and bank overdrafts. On average, every adult was paying £201 too much interest per annum.

James Alexander, co-founder and CEO of Zopa said, “The scale of personal debt in the UK is quite astonishing and the extent to which people are being ripped off by their banks, credit card and personal loan companies is simply outrageous. People in this country desperately need to start shopping around for a better deal. One of the best ways for people to take that important first step to getting their debt under control and managed properly is by taking advantage of the best interest rates available.”

“At Zopa we are proud of the fact that we have topped the Best Buy loan tables consistently for more than a year and that we offer people a much better deal by cutting out the Big Banks completely. Real people get to help other real people and both are better off as a result. Zopa borrowers enjoy lower interest rates than they will find elsewhere and Zopa lenders get far better returns than even the best savings accounts the Banks have to offer. Everybody wins – except the Bankers.”