Personal loan providers hike rates

Thu, 17 Sep 2009

uSwitch.com has identified three companies providing personal loans which have decided to boost rates on the products for new customers, despite the low-interest environment.

Marks and Spencer has increased rates on several of its unsecured personal loans by 1.2 per cent, while those looking to take out a £3,000 to £20,000 borrowing with Egg have seen an interest rise of one per cent to 14.9 per cent.

At the same time, consumers new to Alliance and Leicester have seen £5,000 to £7,499 personal loans increased by 0.1 per cent to 8.9 per cent and £7,500 to £15,000 credit pushed up by 0.8 per cent to 8.7 per cent.

Louise Bond, personal finance expert at uSwitch.com, said: "As consumers struggle to make ends meet and manage their finances, loan providers are looking to offer the best rates to those whose financial behaviour they can closely inspect - which are their existing customers."

Guardian journalist Liz Philips recently claimed that 80 per cent of personal loan providers advertise 'typical' levels of interest, but only "squeaky-clean" consumers will be able to take advantage of those rates.
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