Personal loan rates 'creeping up'

Tue, 21 Oct 2008

Personal loan rates are continuing to "creep up", it has been claimed.

Louise Bond, personal finance manager at uSwitch.com, explained that despite the recent cut in the Bank of England base rate, two personal loan providers have increase the levels of interest they charge.

She said: " Direct Line and Mint have increased their loan rates by up to 4.8 per cent APR for customers, making borrowing even more costly."

However, there are still some good deals around but people will need to put in some work to make sure they do not end up paying over the odds, she added.

Over the last month, eight other providers have increased the interest rates on their personal loans by as much as nine per cent, Ms Bond pointed out.

Recently, a study by Moneyfacts.co.uk found that there are just seven providers offering rates lower than eight per cent.

However, it did note the availability of such deals was "dwindling fast".
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