Consumers Expect Loan Rates To Increase
Over the course of the past few months, we have seen the bank base rate of interest reduce significantly from 5 per cent in October last year, to just 1 per cent last week, following the most recent meeting of the Bank of England’s Monetary Policy Committee (MPC).
Many individuals have saved huge amounts of money each month on the repayments on their homeowner loans, although there does not seem to have been the same corresponding reduction in the cost of a personal loan, whether or not it is a secured loan or an unsecured loan.
Even though the base rate of interest has now dropped to the lowest level it has ever been, many experts are predicting that rates are likely to fall further yet, over the course of the next few months.
However, this view is not one which is shared by a large proportion of the population as a whole. In a recent survey conducted by Lloyds TSB, 24 per cent of the 2000 people who were interviewed believed that interest rates would be higher than they currently are in twelve months time.
Even though interest rates look as though they will remain low for several months to come yet, it is a reasonable assumption to expect an increase once the economy starts to recover.
In the meantime, borrowers who have unsecured personal loans which remain on expensive rates should take advantage of the currently low repayments they are making on their homeowner loan and make regular overpayments on their more expensive credit commitments, such as personal loans, car loans and credit cards, in order to reduce the outstanding balance, thereby placing themselves in a financially stronger position once interest rates start to return to the levels we have all been used to paying previously.
