Wednesday 1st of July 2009
The interest rates on some loans have been pushed up by one per cent by seven providers, new research has revealed, which could lead more Britons into needing individual voluntary arrangement (IVA) advice should their repayments become unmanageable.
Providers including Bradford and Bingley, the Co-operative Bank and Cheshire Bank have raised their loan fees, the study by uSwitch.com noted.
IVA help could be on the horizon for many borrowers after the website stated that on a £10,000 loan over five years, the total amount of interest paid would rise from £2,283 to £2,371.
For Britons with a number of loans, such interest increases could leave their finances in the lurch and require them to reduce their interest repayments through an IVA, which may make their monetary commitments more manageable.
"Hiking loan rates in the current climate is just making an already difficult situation practically impossible for consumers. Much as we understand that the banks are struggling, these are big hikes for people to swallow," said Louise Bond, personal finance expert at uSwitch.com.
Louise Cuming, head of mortgages at moneysupermarket.com, recently reminded tracker mortgage holders that a one per cent interest rate increase could leave them struggling to meet repayments.
