Loan rates rocket by 9%

06 October 2008

In the last four weeks loan rates have soared as the total number of loans available has shrunk from 56 to 52. In the last 28 days eight lenders have increased unsecured personal loan rates by up to 9%, with Black Horse - part of Lloyds TSB - introducing the biggest increases. Loans of between £1,000 and £2,999 from Black Horse are now at 36.9% APR,. while loans of between £5,000 and £7,499 are now charged at an average 25.9% APR.     Meanwhile, Bank of Ireland has raised rates 1.8% - from 8.9% APR to 10.7% APR, while Bradford & Bingley, Lloyds TSB and Marks & Spencer have all increased unsecured personal loans by 1%. At Barclaycard loans have climbed 0.6% from 7.8% APR to 8.4% APR, and they're up 0.5% at Asda, from 7.4% APR to 7.9% APR. Finally Sainsbury's Finance has increased interest charged on its loans by 0.2% from 7.7% APR to 7.9% APR.   "As the news agenda overflows with the global financial meltdown, a plethora of loan rate increases have been implemented in the past four weeks," said Louise Bond, personal finance manager at uSwitch.com. "Lenders have increased unsecured personal loans by as much as 9% APR, making borrowing even more costly for consumers.    "Personal loan 'best buys' are changing every day, which demonstrates just how unpredictable and volatile the current climate really is. Following recent rate increases, both Asda and Barclaycard have fallen from the best buys for a loan of £10,000 over five years. In fact, a few weeks ago, Asda was topping the table with its typical rate of 7.4% APR, but now at 7.9% APR it falls to 5th place with Abbey.   "In the summer months we kissed goodbye to sub-7% APR loans when the remaining six providers dropped out of this bracket, but the sub-8% offering is still prominent. Overall, the loan market is vast, but there are still some good deals out there." Tag this article :

 

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