Wednesday 26th of August 2009
Britons who hope to keep afloat with a loan may find that the majority of deals come with a high interest price tag, a claim suggests.
Even though the Bank of England interest rate currently stands at 0.5 per cent, MoneyExpert.com notes that personal loan rates are "sky-high", with little chance of improvement.
Indeed, people who are struggling to contend with high interest rates on loans could find an individual voluntary arrangement (IVA) freezes the interest. Likewise, Britons who hope to clear other debt by using a personal loan may be better off taking out an IVA, rather than relying on further credit.
"Expect to pay a heavy premium in comparison with the 0.5 per cent base rate on any loan you take out. The days of cheap loans are long gone," asserts Pierre Williams, head of research at MoneyExpert.com.
Recent research from moneysupermarket.com found that borrowers who want to take out a personal loan will pay an average 10.32 per cent annual percentage rate.
By Kimberley Parsons
- 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
- Older people could seek IVA advice instead of building credit debts
