Average Loan Rates Finally Drop

Mon, 20 Apr 2009

New figures from Moneysupermarket.com have revealed that the average interest rate on personal loans fell last week for the first time in more than 18 months. The Bank of England’s persistent base rate cuts appear to be finally having an effect as rates fell from their peak of 8.88 per cent in March to 8.68 per cent in April. Although the reduction may appear minor, it is significant in showing that the market may have bottomed out. The figures for March represented an increase of more than 1.5 per cent on the previous year, despite rates being cut to an all time low of 0.5 per cent.

Head of loans and debt at moneysupermarket.com, Tim Moss, hailed the news as extremely positive for consumers, who he believes will welcome the new, cheaper products launched by lenders in recent weeks. However, Mr Moss did warn that banks are unlikely to ditch their cautious approach just yet, with the majority continuing to ask for hefty deposits and offering lower loan to value ratios. Furthermore, the ban on the sale of payment protection insurance has harmed the profit margins of banks, who will be forced to make up the difference in their interest rates .
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.

 

 

Income Protection Insurance
Get an instant quote with the award winning company

Paying Too Much?

7 out of 10 people are paying too much for their mortgage. To find out if you're one of them click here or fill out a FREE no obligation enquiry form