Deals still available even though loan rates have risen
According to a recent report whilst loan rates in the UK may have increased recently there are still some decent deals available for a number of consumers.
Over the past couple of years the interest rates charges on personal loans are said to have rocketed by around 44 percent. This is despite the fact that the base interest rate has fallen to its lowest level in over three hundred years, reaching an all time low of just 0.5 percent over the past couple of months.
Rising unemployment levels are partly to blame for rocketing interest rates on personal loans, according to some industry officials, with unemployment levels having soared in the early part of this year as the recession continues to take its toll on industry.
Lenders are increasingly wary about customers defaulting on their loans as a result of job and income losses, and in the current financial climate, when they are still reeling from the effects of the global credit crunch, most are not willing to take that risk.
One industry official said: ‘Despite bank base rate being at an all time low, borrowers looking for a personal loan have seen no benefit. With many providers showing just typical rates [only available to those with perfect credit histories], the actual increase a customer has to pay today compared to a few years ago could be much higher. Tighter lending criteria is likely to mean only those with a perfect credit history will be getting the best rates.’
The better interest rates are likely to be made available to those that have a strong credit history, good credit rating, and long standing job with minimal chances of redundancy. However, even then consumers will have to be willing to do their research and compare loans from different providers in order to get the best deal.
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