Loan Rates Increase Again - Loans - News - Moneyfacts

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Loan Rates Increase Again

Loan Rates Increase Again

Category: Loans

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

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 It is now over 6 months old so the content may be out of date.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 Any products featured may be withdrawn by their provider or changed at any time.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

Blue Monday hits nation’s finances

Today has been dubbed Blue Monday – the most depressing day of the year – and considering how many people could be battling with their finances this month, it’s little wonder.

Calls to make the loans market clearer

At first glance the personal loans market may seem simple enough, but get into the nitty gritty and it can be anything but. As a result, some are calling for action to make the market clearer and fairer for all.

Get the cheapest ever personal loan!

Have you woken up with a financial hangover after the festivities? Perhaps you’ve got big plans for the year ahead, or maybe you need a new car? Well, whatever your reasons for needing a loan, you can now snap one up for the cheapest ever rate!