Money News
16th August 2008
'Loan rates still rising
Loan repayment rates have soared to their highest level for seven years, as credit crunch hit lenders continue to squeeze struggling borrowers.
According to finance site Moneyfacts.co.uk, at the onset of the crunch in August 2007, the best available rate on a loan of £5,000 stood at 6.3 per cent.
However, since then this has risen due to constraints in the money markets so that the best rate currently available on a loan for the same sum has risen to 7.6 per cent.
Michelle Slade, an analyst with the site, said: "This is extremely bad news for consumers who may be considering consolidating existing debts to try to drive down their monthly expenditure.
"At a time when every penny counts, if you need a personal loan, you need to make sure that you shop around as it is highly unlikely your bank will offer the best deal.
She added: "Currently on a £5,000 loan there is a difference between the cheapest and most expensive loan of £25.55 per month, which equates to £919.80 more over three years."
The cheapest loan for £5,000 is provided by Moneyback Bank.
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