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Personal Loan rates above 7%

Personal Loan rates above 7%

Category: Loans

Updated: 31/10/2008
First Published: 03/07/2008

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 It is now over 6 months old so the content may be out of date.

Anyone looking for a personal loan can no longer find rates of less than 7%. Yourpersonalloan.co.uk, which is funded by The Co-operative Bank, has increased its rate from 6.9% to 7.3%. Back in June 2006 rates as low as 5.6% were on offer and even this time last year rates as low as 6.1% could be found.

Today the lowest rate on offer is from The AA on its telephone loan at 7.2%. A personal loan of £10K over five years would now cost a consumer £423 more over the term of the loan than it would have two years ago.

Just like with mortgages, lenders are struggling to raise funds to lend out to consumers.As a result this increase is being passed on through the APR offered. With many lenders offering typical rates or personal pricing, it is likely that many customers are being offered a much higher rate.

At a time when costs across the board are increasing, this will be more unwelcome news for consumers. The demand for personal loans is likely to be increasing as more households look to consolidate existing debts. Lenders are tightening criteria and those that can get a loan are finding they have to pay a much higher price.

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 Any products featured may be withdrawn by their provider or changed at any time.

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