Loan rates on the rise

Posted 2008-05-18

New research has found that the average rates of interest on unsecured loans of £5,000 and £7,500 have risen by one per cent over the last six months.

According to MoneyExpert, the rate for a £5,000 sum is around 10.16 per cent compared with 9.4475 per cent in November last year.

The average for a loan of £7,500 has risen to 8.88 per cent from 7.97 per cent in the same time period.

Sean Gardner, founder of MoneyExpert.com, believes that the Bank of England faces a big challenge restoring confidence to the financial markets after lenders raised their rates despite the bank slashing interest rates three times.

"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," he said.

Personal debt in the UK at the end of March was around £1.43 trillion.

Leave a Reply