Loan rates increase
Published On 19 May 2008
New research has indicated that it is getting more expensive to borrow money via loans.Website MoneyExpert.com found that the average rate charged on unsecured loans of between £5,000 and £7,500 has increased by one per cent in the past six months.
According to the site's figures, interest on a £5,000 loan is now 10.16 per cent, compared to 9.45 per cent in November 2007.
For a £7,500 loan, the average rate of interest has increased from 7.97 per cent to 8.88 per cent.
"The Bank of England has a battle on its hands to restore confidence in the credit markets when lenders react to three rate cuts totalling 0.75 per cent by actually increasing rates," explained Sean Gardner, the founder of MoneyExpert.com.
"The unsecured loans market is almost mirroring the mortgage market where the issue is not so much rates but availability - whether or not lenders will let you have the cash.
"However it remains the case that creditworthy customers can still access competitive deals and borrowers should research the market carefully before making an application."
Mr Gardner said that people who could secure larger loans were likely to find their rate of interest was more competitive that for people who wanted to borrow less.
Recent figures showed consumers were increasingly looking for short-term payday loans to help them deal with the credit crunch and tightening economic situation.
