Tuesday 27th of October 2009
Individual voluntary arrangement (IVA) advice could be of help to cash-strapped consumers who, despite the Bank of England’s base rate dropping to an all-time low of 0.5 per cent, have been affected by the interest rate attached to personal loans continuing to rise.
Research by Moneyfacts shows that the average cost of a £25,000 loan has risen by more than £1,800 since the credit crunch began - and by £335 in the last six months.
Even on a loan of just £5,000, the average interest rate set by lenders has grown.
Michelle Slade, Moneyfacts spokesperson, said: "Lenders are worried that an increased proportion of their customers will default on their loan. It is highly likely that new customers are paying an increased premium to cover the defaulting customers."
Anybody struggling to pay back a debt, possibly because of high interest rates, may wish to seek IVA advice to find out how they could make affordable repayments.
IVAs can freeze interest rates - which may be of great interest to people with a personal loan worried that rates could rise further.
By Ashley Littley
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA questions may get Brits into the savings habit
