Thursday 7th of May 2009
Consumers who take out unsecured loans are finding that interest rates have risen significantly over the last two years, research has found.
Despite the Bank of England’s base rate having fallen to an all-time low, a study by Moneyfacts.co.uk revealed that the average interest charged on a £5,000 loan has risen 44 per cent since May 2007.
The typical rate for a £25,000 loan, meanwhile, is up 26 per cent and analyst at the price comparison site Michelle Slade explained that rising unemployment means rates go up borrowers are most likely to default on these payments.
Those who are struggling to cope with their unsecured loans may wish to seek IVA help, as an agreement could be reached with creditors to freeze interest charges and establish an affordable repayment plan.
Meanwhile, the Bank of England has once again opted to maintain its base rate at 0.5 per cent - the monetary policy committee having lowered it to that level in March.
- 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
- Low interest rate plus IVA advice could mean a head start on mortgage payments
