Unsecured Loan Rates On The Rise

Wed, 22 Oct 2008

British consumers have been hit by a rise in unsecured loan rates and a drop in the Bank of England base rate .

Some UK lenders, including Mint and Direct Line, have increased their rates on unsecured loans by almost 4.8 per cent, with other lenders expected to follow suit.

Consumers with loans under £7500 have suffered the biggest rise in rates, while those with credit cards have also seen rates surge by as much as 40 per cent.

The reduction in Bank of England base rate means that UK consumers are receiving less income from their savings in addition to having to pay more for their borrowings .

The average APR (Annual Percentage Rate, which includes the interest rate, fees and all other charges) has risen from 21.2 per cent in 2005 to 29.79 per cent, representing an increase of just over 40 per cent.
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