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Loan News Loan Rates Rise Despite Base Rate Remaining Low 18470063

Editorial Team

Loan rates rise despite Base Rate remaining low

28 October 2009 / by Andy Davies

Lenders have continued to increase loan rates, according to Moneyfacts, despite the fact that the Base Rate has remained at a historic low of 0.5 per cent for the past six months.

While the average interest rate for a £1,000 loan has remained at 19.7 per cent since March this year, the cost of larger borrowing has increased.

For instance, the average rate of interest for a £5,000 loan has risen by 0.2 per cent to 12.4 per cent, while borrowers looking for a £10,000 loan can now expect to pay around 9.9 per cent in interest, compared to 9.4 per cent in March.

According to Moneyfacts, Norwich & Peterborough Building Society has enforced one of the biggest increases – upping rates by 1.7 per cent for loans between £10,000 and £25,000.

In contrast, Abbey loan rates have increased by 0.1 per cent to 0.6 per cent for those looking to borrow between £1,000 and £3,000.

Commenting, Michelle Slade, spokesperson at Moneyfacts.co.uk, said: “Lenders have continued to tighten up their lending criteria, with only customers with blemish free credit records likely to be accepted for a personal loan. Those customers that are accepted are having to a pay an increasingly higher price.”

As the average interest rate for a £25,000 loan has risen to 10 per cent in the last six months – an increase of 0.5 per cent – Ms Slade says this has meant £335 being added to the average cost of a £25,000 personal loan.

Ms Slade attributes these increases in rates to rising unemployment, suggesting that “lenders are worried that an increased proportion of their customers will default on their loan”.  

“It is highly likely that new customers are paying an increased premium to cover the defaulting customers who took out loans at the previously more competitive rates,” she said.

She warned potential borrowers that this “upward trend in rates looks set to continue”.

“Anyone in need of a personal loan really needs to ensure they do their homework to find the best deal possible or they will be left severely out of pocket,” she added.

© Fair Investment Company Ltd
Lender Min – Max Loan Credit History Representative APR Term Apply
£1,500 – £50,000 Good to Poor Credit 19.1% 2 to 5 Years Get Quotes >
Take charge of your car finance with Zuto. Loans of £1,500 – £50,000 for 2-5 years. Representative Example: The Representative APR is 19.1% (fixed) so if you borrow £7,500 over 49 months at a rate of 19.1% p.a. (fixed) you will repay £218.78 per month and repay £10,501.26 in total. b>
Provider Loan Amount Credit History Rates From Term  
£1,000 to £25,000 Good Credit Only 3.0%

APR
Representative

(£7,500-£15,000)

 1 year to 5 years Get Quotes >
Loans from £1,000 to £25,000. Fixed monthly payments and no set-up charges. 3.0% APR Representative. A loan of £10,000 over 5 years will cost you £179.68 per month at a representative 3.0% APR. The total cost after 5 years is £10,780, which includes £780.80 interest at 3.0% fixed and a £0 fee. The total amount of credit is £10,000. The rate and fee you are offered will depend on your individual circumstances
£1,000 to £20,000 Good Credit Only 3.00%

APR
Representative

(£7,500-£15,000)

 1 to 5 years Get Quotes >
Loans from £1,000 to £20,000. Instant online decision. Representative 3.0% APR. Based on a loan amount of £10,000 over 60 months at an interest rate of 3.0% p.a. (fixed). Monthly repayment of £179.51. Total amount repayable £10,770.60.
£2,500 to £25,000 Good Credit Only 3.3%

APR
Representative

(£5,000-£25,000)

 2 to 5 years Get Quotes >
Loans from £2,500 to £25,000. Fixed monthly payments and no set-up charges. 3.3% APR Representative. A loan of £5,000 over 3 years will cost you £135.61 per month at a representative 3.3 APR. The total cost after 5 years is £8,136.60. The rate and fee you are offered will depend on your individual circumstances
£1,000 to £20,000 All Credit Histories Considered 42.5%

APR
Representative

 1 to 6 Years Get Quotes >
Rebuild Your Credit. Instant Online Decision using ‘soft’ credit searches (Won’t affect your credit score). Funds as soon as same day. No early repayment fees. Dedicated Customer Support Team. Representative Example: If you borrow £3,000 over 3 years at a rate of 31.9% per annum (fixed) you will repay £137.31 per month & £4,943.25 in total.
£1,000 to £20,000 All Credit Histories Considered 99.90%

APR
Representative

 1 to 2 Years Get Quotes >
Interest Rates from 35.9% – 99.9%, depending on the information you provide in your application. Fixed monthly repayments. Instant Online Decision. Representative Example: The Representative APR is 99.9% – Based on an assumed loan amount of £1,500 over 24 months at an interest rate of 71.3% p.a. (fixed) you would pay £118.88 a month and £2,853.12 in total.
Lender Min – Max Loan Credit History Representative APR Term Apply
£7,500 – £14,999 Excellent Credit Only 3.90% 1 to 5 Years Get Quotes >
3.90% APR for new customers. 3.60% APR for existing customers. Loans of £7,500 – £15,000 for 1-5 years. Representative Example:If you borrow £10,000 over 5 years at a Representative rate of 3.9% APR fixed and an interest rate of 3.90% you would pay £183.41 per month. Total charge for credit will be £1,004.48. Total amount repayable is £11,004.60. b>
£7,500 – £20,000 Excellent Credit Only 4.44% 1 to 5 Years Get Quotes >
All
£1,000 – £25,000 Excellent Credit Only 7.00% 6 Months to 5 Years Get Quotes >
Loans from £1,000 to £25,000. Fixed monthly payments and no set-up charges. 7.0% APR Representative. Based on an assumed loan amount of £5,000 over 24 months at an interest rate of 7.0% p.a. (fixed). Monthly repayment £223.86. Total amount payable £5,372.64
£1,000 – £20,000 Poor Credit 48.50% 1 to 3 Years Get Quotes >
Provider Loan Amount Credit History Rates From Term  
£10,000 to £250,000 Good Credit Only 4.45% 3 to 25 Years Get Quotes >
£20,000 to £100,000 All Credit Histories Considered 4.45%

APR

 3 to 30 Years Get Quotes >
£15,000 to £200,000 All Credit Histories Considered 4.49%

APR

 3 to 25 Years Get Quotes >
£20,000 to £100,000 Fair Credit 6.74% 3 to 30 Years Get Quotes >
£10,000 to £50,000 All Credit Histories Considered 9.0%

APR

 5 to 25 Years Get Quotes >
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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Provider Min – Max Loan Credit History APR Term Max LTV Apply
£5,000 – £80,000 Fair Credit 9.95% 3 to 25 Years 60% Get Quotes >
£10,001 to £50,000 Poor Credit 15.00% 5 years to 25 years 70% Get Quotes >
£10,000 – £500,000 All Credit Profiles Considered 15.10% Typical
(Variable)		 3 Years – 25 Years Up to 90% Get Quotes >
The Loans Engine are a broker, not a Lender. The Loans Engine will connect you with a Lender suitable for your needs. They do not charge you an upfront fee but if your application is successful a Broker commission may be charged.
£3,000 to £10,000 Fair Credit 19.60% 3 to 10 Years 90% Get Quotes >
£5,000 to £10,000 Poor Credit 30.60% 3 to 10 Years 120% Get Quotes >


THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Lender Min – Max Loan Credit History Representative APR Term Apply
£1,000 – £25,000 Excellent 7.90% 6 Months to 5 Years Get Quotes >
Loans from £1,000 to £25,000. Fixed monthly payments and no set-up charges. 7% APR Representative. Based on an assumed loan amount of £5,000 over 24 months at an interest rate of 7.0% p.a. (fixed). Monthly repayment £223.86. Total amount payable £5,372.64
£1,000 – £2,999 Good Credit Only 13.70% 1 to 5 Years Get Quotes >
3.90% APR for new customers. 3.60% APR for existing customers. Loans of £7,500 – £15,000 for 1-5 years. Representative Example: 3.90% APR Representative (fixed). Based on an assumed loan amount of £10,000 over 60 months at an interest rate of 3.90% p.a. (fixed). Monthly repayment £183.41. Total amount payable £11,004.60. b>
£1,000 – £2,999 Good Credit 21.14% for loans up to £2,999 1 to 5 Years Get Quotes >
All
£1,000 – £20,000 Poor Credit 48.50% 1 to 3 Years Get Quotes >
£1,000 – £5,000 (Guarantor Loan) All Bad Credit Considered 53.80% 1 to 5 Years Get Quotes >

Fair Investment Company is independent and provides a selection of some of the leading loan deals available. Our service does not compare or contrast all of the loan deals currently available in the market. If you would like to arrange any of the products shown in the table please click on the “Apply” link which will take you to the provider’s website where you will be able to view further details of the product and apply online.

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