Increasing numbers of consumers are expected to start taking out personal loans to pay for large purchases, before the VAT rate rises to 20 per cent in January.
Sainsbury's Finance says it expects the UK population to be spending around £53 billion on large purchases in advance of the VAT rise, which could give the economy a welcome boost.
Before 4 January, some 15.5 million people are thought to be looking at making a large purchase and Sainsbury's Finance thinks the tactic is wise one. The bank's analysts claim consumers can save collective £1 billion by making these purchases before the rise.
Sainsbury's says it is worth shopping around for the best loan rates to ensure consumers don’t spend what they have saved on interest payments to their personal loan company.
The bank was of course keen to promote its own loan rates, with Steven Baillie, the head of loans, stating, "Those who are planning to make a big purchase with a loan should extend their savvy to their finances and shop around for a loan that best suits their requirements."
"Our rates are consistently amongst the most competitive available," he added.
