Personal loan rates soaring, figures show

Mon, 13 Oct 2008

Personal loan rates are continuing to soar, according to new research.

A study by Moneyfacts.co.uk has found that there are just seven providers offering personal loans with an interest rate of less than eight per cent.

Michelle Slade analyst at Moneyfacts explained that the cheapest product on the market is from Yourpersonalloan.co.uk and has a rate of 7.6 per cent.

However, as the deal is only available to home owners, it has a limited appeal, she states.

Ms Slade said: "Many consumers will be looking to consolidate debts as a way of reducing their outgoings, but the reduction is not going to be anywhere near as much as it once was."

People who opt for payment protection insurance should avoid taking it from their personal loan provider as this is usually twice as expensive as the best deal on offer, she added.

Recently, a study by uSwitch.com found the number of unsecured personal loans available fell from 56 to 52 over a four week period.
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