A survey of the rates charged by Maryland banks for consumer loans shows that it pays to shop around before taking on such a debt.

A continuing study by the Consumer Protection Division of the Maryland attorney general's office revealed differences of as much as 4 percent in the rates charged for unsecured personal, home improvement, credit card and auto loans.

The biweekly survey of 104 banks, first made last November, also found that larger banks generally charged higher rates for each type of loan than smaller banks.

In conducting the survey, consumer protection staff members telephoned the banks and asked for rates on 36-month personal loans of more than $3,500, 60-month unsecured home improvement loans of more than $3,500, 48-month auto loans of more than $3,500 and credit card balances up to $700.

The Jan. 6 survey showed that the Maryland National Bank, the largest in the state with $2.3 billion in deposits, quoted 18 percent for the home improvement loan and 18 percent for the auto loan. The Union Bank and Trust Company in Oxon Hill, with $36 million in deposits, was charging 16 percent for the home improvement loan and 15 percent for the auto loan.

The Jan. 6 survey also showed that the average interest rate quoted for personal loans from large banks was 18 percent, versus 17.1 percent from medium-sized banks and 16.9 percent from small banks surveyed. Similarly, larger banks were asking an average of 15.9 percent for auto loans while medium and small banks wanted 15.4 percent. For the purposes of the study, bank size was determined by the amount of deposits.

Consumer protection chief Robert Erwin emphasized that the rates obtained in the survey will vary in individual cases depending upon the applicant's credit history, income, job history and other circumstances.

In addition, because the 11 largest state chartered banks make 79 percent of the consumer loans in the state, their rate-setting behavior carries a disproportionate weight in the market, according to the survey.

The major purpose of the study was to encourage consumers to comparison shop for loans, consumer protection officials said.

They added that the study was prompted in part by a 1980 law that raised the maximum permissible interest rate in Maryland from 12 to 18 percent for most consumer loans. Officials said they wanted to find out whether competition among banks would keep rates below the 18 percent limit.

Advocates of higher interest rate limits or removal of the limits altogether have argued that such competition would keep the rates within "reasonable limits."

State Banking Commissioner Joseph R. Crouse said he saw nothing in the survey to pronounce the market for consumer loans in Maryland uncompetitive at this time, although the findings raise some questions.

"The only (loan rates) I have some questions about are the unsecured personal loans. For the others I think that market forces would tend to control rates," said Crouse, noting that the rates for unsecured personal loans tended to approach the 18 percent limit for most banks surveyed.

The commissioner also said that any attempt to hold rates below the existing market could result in a withering of consumer credit in the state.

Crouse said he was not certain why larger state banks charge more than smaller ones. Don Haney, in charge of consumer lending at the small ($73 million in deposits) First National Bank of Southern Maryland in Upper Marlboro, pointed out that smaller banks are much more dependent upon their consumer loan business than larger banks, which can focus on more profitable commercial lending.

This means that smaller banks are more willing to make consumer loans at more competitive rates to keep loyal local customers from the larger, multibranched banks. "We can't compete with the larger banks for services," Haney said.

Erwin's office workers will continue the surveys through March, then will evaluate whether the surveys should be continued.

Crouse has considered asking the legislature for authority to regularly collect rate information from the banks for public benefit, but noted, "I can't say that I met with a lot of enthusiasm from the legislature or the banks."

To obtain copies of the survey, citizens may call the Consumer Protection Division of the Maryland Attorney General Office at 301-659-4300 or write the office at 26 S. Calvert St., 8th Floor, Baltimore 21202.