Borrowers need to be "on their toes" when considering taking out a loan, it has been claimed.
According to Defaqto, smaller loans are often charged a higher rate of interest than bigger sums.
The financial research company explained that borrowing as little as £1 more could result in an interest rate reduction of around eight per cent.
"Borrowers should take care when choosing the size of loan they want, as a little effort in researching the interest rates charged on different tier levels could save them a considerable amount of money," advised David Black, principal consultant of Banking at Defaqto.
He said that the length of the loan is an important factor as choosing a longer period can result in lower interest rates.
Finance website Moneyfacts.com recently urged consumers to consider consolidating their debts to one loan.
The website claimed this could often lead to lower monthly payments and a reduction in interest rates.
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