Loan Rates Starting To Fall

Wed, 20 Jan 2010

New research has revealed that borrowers are finally starting to see a fall in loan interest rates .

According to price comparison site Moneysupermarket.com, Nationwide, Halifax and Sainsburys have given consumers a welcome boost in recent weeks by reducing their loan rates .

The reductions have caused the average interest rate of the top 10 loan deals to fall to 8.35 per cent - the lowest figure since the Bank of England reduced the base rate to 0.5 per cent last March.

However, the figure is till a lot higher than the average rate of the top 10 loan deals in 2006, which was 5.8 per cent. The base rate at the time was 4.5 per cent.

Tim Moss, head of loans at Moneysupermarket.com, explained that this means the top lenders have increased their profit margins over the last three years by an "eye watering" 6.55 per cent.

But he added that the tide may be turning. "Recent moves suggest lenders are willing to open their purse strings just a little wider," he said.

Chris Eagle, commercial manager at Creditchoices.co.uk, advised borrowers looking for a cheap loan to make sure they compare loan rates from a number of providers in order to get the best deal.
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