Loan rates rising

Tue, 20 Nov 2007

The credit crunch is having a significant impact upon average rates for unsecured loans , it has been claimed.

Research by MoneyExpert.com found that for a loan of £5,000, average rates are now approximately 9.5 per cent.

However, people seeking to take out loans of £7,500 are likely to see rates fall to an average of 7.97 per cent, the firm noted.

Sean Gardner, chief executive of MoneyExpert.com, said: "Borrowers are feeling the pinch with those wanting to borrow less getting squeezed the most."

Lenders appear to consider people borrowing larger amounts to be "a better risk" than those taking out smaller loans, he commented, adding that providers are "getting tough" on loan applications .

Tim Moss, head of loans at moneysupermarket.com, recently stated that a number of people who ordinarily would be able to take out loans are having their applications rejected.

Banks are becoming increasingly selective when lending money and so many "deserving" people are "suffering" as a result, he said.
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