More rate increases for unsecured personal loans

28 August 2008

People considering unsecured personal loans as a means of consolidating debts may be interested to know two more lenders have put their rates up.

Moneyback Bank has increased loans on the £3,000 to £4,999 tier from 10.8 per cent annual percentage rate (APR) to 11.9 per cent APR – an increase of 1.1 per cent.

It has also increased the APR on its loans between £5,000 and £15,000 by 0.8 per cent.

Meanwhile, Alliance & Leicester has also pushed its APR up to 8.7 per cent – a one per cent increase – on loans on the £7,500 to £15,000 tier.

Comparison site uSwitch, citing the increases, said borrowers should research the best rates for their situation and fixed rates may be beneficial.

Simeon Linstead, head of personal finance at the site, commented: "In this volatile credit market, borrowing on a fixed rate loan or consolidating debts can offer borrowers the peace of mind that their interest rate and monthly payments are fixed for the term of the loan."

Debt consolidation may be one option for people with debt problems. For more serious personal finance problems, an Individual Voluntary Arrangement may help people get out of debt.

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