Cheap loans a thing of the past

A recent article posted by the Times shows that cheap loans are starting to be something closer to extintion. It apears that lenders are fighting against each other to see who can provide you with the worst loan. Despite goverment’s cuts to the base rate, interest rates are continuing to soar. Here is an extract:

Several providers have increased personal loan rates in the past four weeks – including Barclaycard by 2 per cent, Sainsbury’s Finance by 1 per cent, and Britannia building society and Lombard Direct by 0.5 per cent.

Louise Bond of uSwitch.com said: “Recent activity in the loans market seems to indicate that providers are actually battling to get themselves out of the best buy tables. The cuts by the Bank of England are simply not being felt by people looking to take out a personal loan.” :

At the same time that the interest rates are going up, the choice of lenders willing to offer you a cheap loan is dwindling, as the article continues:

Whilst six months ago borrowers could get rates of 7 per cent or less, all of these deals have now disappeared. Moneyback Bank, which consistently offered loans as low as 5.5 per cent over the past two years, has closed for new business completely.

Last year almost 1.3 million people took out an unsecured personal loan to consolidate debts – but with interest rates rising and credit being harder to obtain, less borrowers will have that option.

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This entry was posted on Monday, December 15th, 2008 at 11:18 am and is filed under Personal loans, UK loans.