Best Loans News

Everybody in the UK with any kind of mortgage or loan breathed a sigh of relief a couple of weeks ago at the prospect of cheaper monthly loan repayments, as the Bank of England announced a cut in the base rate of interest of 0.5 per cent.

However, in many cases this optimism was short lived as a large number of lenders failed to pass on the savings to their customers, due to the cost of inter bank borrowing actually increasing, rather than following the trend of the base rate.

On the back of this news, a number of providers in the unsecured loan market have actually increased the rate they charge borrowers for a personal loan.

Over the course of the last month, eight lenders have increased their loan rates by anything up to 9 per cent and these have been joined this week by Direct Line and Mint, who have both increased their unsecured loan rates by 4.8 per cent on loans of between £5000 and £7499, giving an Annual Percentage Rate (APR) of 13.9 per cent, although this rate is lower for larger loan amounts.

Louise Bond from the price comparison website U Switch said “The current economic climate is unpredictable and volatile. The recent decrease from the Bank of England may provide some relief to home owners where the rate cut is passed on, but consumers looking for a personal loan may not get as good a deal as they expected.

However, there are still some good loan deals out there, it’s just a case of shopping around to make sure they are not paying over the odds.”