Friday 20th of March 2009
Borrowers of unsecured loans are facing rising interest charges despite cuts to the Bank of England’s base rate, it has been noted.
According to MoneyExpert.com, difficulties with debt are likely to increase as the average rate is now 13.2 per cent.
This figure discounts new low-value products with particularly high charges and is up from the 10.4 per cent level of a year ago.
With the Bank’s rate having been cut by 4.75 per cent in that time, director of the price comparison site Sean Gardner suggested that providers appear to be "operating on a completely different planet".
He advised consumers to "tread carefully" when it comes to low-value deals, adding: "Borrowers are obviously more likely to be accepted but risk facing enormous interest bills if they fall behind in their repayments."
This month the Bank of England cut the base rate to its lowest-ever level of 0.5 per cent - with minutes of the monetary policy committee meeting revealing that it was a unanimous decision.
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