Loans: credit crunch `has ended`

22 May 2009

Economists have suggested that the `credit crunch` has come to an end, according to The Times, after the LIBOR (London Inter-Bank Offered Rate) fell to record lows.

The LIBOR rate - the average rate at which financial institutions lend to each other - has a large influence on the interest rates on personal loans, mortgages and other forms of credit.

In recent months, the Sterling LIBOR rate has been relatively high compared with the base rate, which may have limited how low banks have been willing to set their rates on loans and mortgages, as well as the availability of loans in general.

However, the margin between the two has been shrinking in recent weeks.

A loans expert for Think Money commented: "While mortgage rates have fallen significantly compared with only one or two years ago, rates on personal loans have remained fairly high by comparison.

"However, there have been recent signs that lenders are becoming more willing to lower their rates and increase the availability of loans, which could spell good news for borrowers and the wider economy."

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Think Money work with a panel of lenders to offer a range of loans. If you are thinking about getting a loan, contact one of our expert loan advisers today.

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