Expectant parents borrow £2.32 billion in baby loans

Parents eagerly awaiting a new baby will need an average of £2,980 to fund purchases such as decorating and furnishing the nursery, a buggy, car seat, baby clothes and toys according to new research from Sainsbury's Finance Personal Loans.

The research found that over the last five years 6.1 million Brits have planned or are currently planning for a new addition to their family and expectant parents will fund their purchases a number of ways including using their savings, borrowing from family and friends, credit cards and personal loans.

Whilst the average amount spent amongst all parents and parents to be is £2,980, around 643,000 parents and expectant parents will borrow additional money to fund larger purchases such as a new car or home improvements (£5,010).  Over five years parents have taken out personal loans worth an estimated £2.32 billion to fund such purchases.

Sainsbury's Finance Personal Loans is warning expectant parents to shop around to ensure they get a competitive rate on any borrowing to fund their baby purchases. The research found that the average value of personal loans taken our by new and expecting parents was £5,010.  Analysis by Sainsbury's Finance has found that the cost of borrowing £5,010 over a period of three years can vary by as much as £1403.64 depending on the loan chosen. Sainsbury's Finance offers customers a five star Moneyfacts rated product at just 8.7%, whilst the most expensive loan for this amount is 26.9%.

Steven Baillie, Head of Loans, Sainsbury's Finance, said: "Preparing for a new arrival can be expensive when you take into consideration costs such as buying the necessary equipment, upgrading the family car or maybe even extending your property.  Taking out a loan with an uncompetitive rate can make a huge difference to the overall costs.  Sainsbury's Finance is making the cost of borrowing affordable for its customers with market-leading rates."

The research found that Scottish parents will fork out the most to prepare for their new arrival (£3,690), followed by those living in the South East (£3,510).  The most frugal parents and expectant parents were those in the Midlands who spent an average £2,510 when preparing for their baby's arrival.

For further information on a Sainsbury's Finance Loan, visit sainsburysfinance.co.uk.