Lenders Increase Interest Rates On Personal Loans

Wed, 30 Apr 2008

Firms offering personal loans have raised their interest rates in response to credit crunch, an industry expert has revealed.

Michelle Slade, an analyst at financial advice website Moneyfacts.co.uk, claims that the rates on personal loans are following those on mortgages due to the recent downturn in the financial markets.

She highlighted how the interest on loans from banks has increased since the start of the year, while lenders such as NatWest, Barclaycard, the AA and Tesco Personal Finance have all followed suit in the past week.

"It's not only mortgage rates that continue to increase, so too have the rates and monthly repayments on personal loans," she commented.

"Since the beginning of the year more than half of lenders offering personal loans have made changes to their rates ."

However, Slade added that there are some providers that have actually reduced their selected rates since January, including the Yorkshire Bank and Clydesdale, meaning there are still some good deals to be found on the market.

Moneyfacts has advised consumers looking to take out a personal loan to ensure they carefully check the 'typical rate' for any catches and to shop around for the best loan rates .
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