Bailed Out Banks Continue to Raise Loan Interest Rates
Interest-Rates / Credit Crisis 2009 Oct 26, 2009 - 08:38 AM GMTBy: MoneyFacts
Since Bank Rate dropped to the historic low level of 0.50% in March, loan rates have continued to increase.
In this period half of all lenders offering personal loans, have upped their rates.
See appendix for details of which lenders have increased rates and by how much
| Loan Rate | Average Rate March 2009 | Average Rate Today |
£1,000 |
19.7% |
19.7% |
£5,000 |
12.2% |
12.4% |
£10,000 |
9.4% |
9.9% |
£25,000 |
9.5% |
10.0% |
| Source: Moneyfacts.co.uk 26.10.09 | ||
Michelle Slade, spokesperson at Moneyfacts.co.uk commented:
“Lenders have continued to tighten up their lending criteria, with only customers with blemish free credit records likely to be accepted for a personal loan.
“Those customers that are accepted are having to a pay an increasingly higher price.
“In the last six months alone, £335 has been added to the cost of the average £25,000 personal loan, taking the total increased cost for borrowers on a £25,000 personal loan since the crunch began to a staggering £1,804.
“Unemployment continues to rise and 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 who took out loans the previously more competitive rates.
“The upward trend in rates looks set to continue. Anyone in need of a personal loan, really needs to ensure they do their homework to find the best deal possible or they will be left severely out of pocket.”
Appendix
| Provider | Increase | Loan Tiers increase applicable too |
| Abbey (Existing Customer Loan) |
0.5% to 0.6% | £1,000 to £3,000 |
| Bank of Ireland | 0.3% to 1.6% | £1,000 to £25,000 |
| Barclays Bank (Barclayloan Plus) |
1.0% | £7,500 to £25,000 |
| Cheshire BS | 1.0% to 2.0% | £2,000 to £25,000 |
| Cumberland BS | 1.0% | £15,000 to £25,000 |
| Furness BS | 1.0% | £15,000 to £25,000 |
| Lloyds TSB (Online) |
0.6% to 4.0% | £1,000 to £25,000 |
| NatWest | 0.5% to 4.0% | £5,000 to £25,000 |
| Norwich & Peterborough BS | 1.7% | £10,000 to £25,000 |
| Royal Bank of Scotland | 0.5% to 4.0% | £5,000 to £25,000 |
| Smile | 1.0% | £15,000 to £25,000 |
| Stroud & Swindon BS | 1.0% | £15,000 to £25,000 |
| The Co-operative Bank | 1.0% | £15,000 to £25,000 |
| Ulster Bank | 0.5% | £20,000 to £25,000 |
| Yourpersonalloan.co.uk | 0.2% | £5,000 to £25,000 |
| Source: Moneyfacts.co.uk 26.10.09 | ||
www.moneyfacts.co.uk - The Money Search Engine
Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.
© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
