Personal loan rates reach nine year high

Tue, 02 Feb 2010

An independent provider of loan information has claimed that personal loan rates have reached a nine-year high.

Moneyfacts.co.uk has stated that uncertainty surrounding debt repayments has caused unsecured personal loans to witness some of the biggest increases in the UK lending market.

Personal loan rates are currently at their lowest point in nearly a decade, despite the bank base rate being at a record low level.

In contrast, when loan rates last peaked in 2001, the bank base rate was at its highest point in the last decade.

Michelle Slade, spokesperson for moneyfacts.co.uk, explained that there is no certainty that personal loan borrowings will be repaid.

She added: "Unemployment remains high and when people are struggling to meet repayments, unsecured lending is one of the first debts they stop repaying."

Meanwhile, it has been revealed that recent borrowing on credit cards, loans and overdrafts has outreached the amount being paid back for the first time since the summer.
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