Consumers can save €80-€1,200 by shopping around for personal loans, the Irish Financial Services Regulatory Authority (Ifsra) said yesterday.
The financial regulator repeated its warnings about payment protection insurance, which it stressed was an optional and expensive type of insurance sold in conjunction with personal loans.
The survey shows that the best value personal loans are available to members of EBS Building Society, who are charged an annual percentage rate of interest (APR) of 7.45 per cent.
The total cost of credit for an EBS member on a loan of €7,000 repaid over three years is €805, compared to €1,180 for someone who arranges a fixed-rate personal loan through a Bank of Ireland branch.
The cost of credit at CitiFinancial, which targets high-risk borrowers turned down by other lenders, was a massive €2,799.
On a €3,500 loan repaid over one year, the cost of credit is €138 for EBS members, compared to €227 for borrowers at National Irish Bank (NIB). However, NIB proves much better value for larger loans. On a loan of €13,500 being repaid over five years, NIB charges an interest rate of 7.5 per cent APR, the second-lowest rate after EBS.
For the first time, the financial regulator included sample interest rates from credit unions.
The rates varied widely from 6.9 per cent at one unnamed credit union to 12.6 per cent at another, suggesting that using credit unions can be either the cheapest and among the most expensive ways to borrow.
Research by lender GE Money suggests that over a third of Irish adults would consider switching to a cheaper loan provider, even if the savings were less than €100.
The financial regulator's consumer director, Mary O'Dea, said consumers should investigate the full range of options available to them before borrowing money - including not borrowing at all.
"Whatever the cost of your loan, the most important thing is whether you can repay it over the term. Think about whether you would be better off saving the money instead.
"Waiting until you can afford what you want is painless compared to finding yourself trapped with a loan you cannot afford to repay," Ms O'Dea said.
The financial regulator advised borrowers to think carefully before buying payment protection insurance, to cover repayments in the event of redundancy or ill health.
"If you have other insurance like life, serious illness or income protection insurance, or sickness benefits through your job, payment protection insurance may not be necessary for you. Think about how likely it is that you will be made redundant during the term of your loan," Ms O'Dea said.
Copies of the personal loans cost survey and a guide to personal loans and credit is available from the financial regulator at lo-call 1890 777 777, by visiting www.itsyourmoney.ie or by calling into the consumer information centre at College Green, Dublin.
