Loan Rates Increase Again - Loans - News - Moneyfacts

News

Loan Rates Increase Again

Loan Rates Increase Again

Category: Loans

Updated: 31/10/2008
First Published: 31/07/2008

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Borrowing pain continues as loan rates increase again

Family finances continue to be stretched, causing many to consider consolidating existing debts into one loan as a means of reducing monthly outgoings.Borrowers, however, will find that the reduction may not be as great as expected.

14 lenders have increased loan rates in the last month, with two lenders, AA and Tesco Personal Finance, increasing rates twice.

Abbey has increased rates by 5% to 12.9% on loans of less than £4,950. If a consumer borrows £4,950 from Abbey, they will be charged around £165 per month, totalling £5,940 over three years. If they borrow £5,000, the rate drops to 7.9% and they will be charged around £156 per month, totalling £5,616.

This equates to £5,616 over three years, meaning they would save around £324 over the period by borrowing £50 more!

One lender, Moneyback Bank, has bucked the trend and reduced rates by 0.20%. The lender pays 7.6% on loans of between £5K and £20K, putting it just below a market leading product.

Anyone looking to consolidate their debts needs to make sure they shop around. Remember that if you do opt for payment protection insurance, the lowest rate doesn't always equal the cheapest loan.

Related Links:


Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Regulator to take closer look at high-cost credit

When used well, credit can be a viable way to help make ends meet and balance the books – but the problem comes when that credit is of the high-cost variety. The regulator has will be taking a closer look at the sector to see what else can be done.

The payday loan market is still broken

The payday loan market has been under fire a lot in recent years, and as a result, the financial regulator stepped in. But has it made a difference? Unfortunately, it looks as though there’s still a lot of work to be done.

Get a record low rate loan - if you qualify

Competition in the personal loans market is as hot as ever, so much so that one loan provider has slashed rates to the lowest on record – but only to those who fit the bill. The shopping bill, that is…
 
Close