Jump to main content of pageaccessibility informationSitemap
15 Oct 2019

Go Direct Personal Finance News  2009

Loan rates jump 44%

Borrowers looking for an unsecured personal loan have seen rates jump by up to 44% in just two years.

Those looking for a £5,000 loan have been hardest hit as the average rate jumped from 8.6% in May 2007, to 12.4% today.

Loan Amount

Average Rate Now

Average Rate May 2008

Average Rate May 2007

Rate Increase

% increase over two years

£1K

19.5%

18.8%

17.2%

+2.3%

13%

£5K

12.4%

10.2%

8.6%

+3.8%

44%

£10K

9.2%

8.5%

7.4%

+1.8%

24%

£25K

9.2%

8.3%

7.3%

+1.9%

26%

Source: Moneyfacts.co.uk 6.5.09

Michelle Slade, analyst at Moneyfacts.co.uk, commented:

“Despite bank base rate being at an all time low, borrowers looking for a personal loan have seen no benefit.

“Those looking for just £5,000 have seen a staggering jump in the cost of a loan.

“In May 2007 a customer would have paid £664 interest on a £5,000 loan over a three year term, where as today that has jumped to £957.

“With many providers showing just typical rates, 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.

“Rising unemployment has meant the risk of customers defaulting on unsecured loans has increased and this increased risk is being seen in higher rates.

“If a customer is struggling to meet repayments, unsecured lending is likely to be the first on which customers default, rather than secured lending such as their mortgage.

“In the last year, 19 personal loan products have been withdrawn from the market. If a personal loan is required, borrowers have much less options.

“Shopping around is key. Only Sainsbury’s customers who hold a Nectar card can a loan rate of less than 8.0%, with the AA and Yourpersonalloan.co.uk offering rates of 8.0%.”

 

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £500

Remortgage | Mortgage Guide | Remortgage Guide | Life Insurance Quote | Mortgage Life Insurance | Decreasing Life Insurance | Home Insurance Quote | Conveyancing Quote | Mortgage Comparison | Free Mortgage Advice | Mortgage Rates | Mortgage Payment Calculator | Mortgage Protection | Best Mortgage | Mortgage Lenders | Income Protection | Remortgage Lenders | Gas and Electric | Remortgage Calculator