Personal loans: no sign of rate cuts

17 November 2008

Lenders have still shown no sign of cutting interest rates on personal loans, over a week after the Bank of England’s dramatic base rate cut to 3%.

It was hoped that the 1.5% base rate cut would encourage lenders to cut interest rates on mortgages and personal loans, but so far only mortgages seem to have been affected.

However, many economists are predicting further base rate cuts, with some expecting to see a base rate as low as 1% by the middle of next year – which could encourage lenders to reconsider their interest rates.

A loans expert for Think Money said: “The cost and availability of loans does not seem to have been affected much by the recent base rate cut. However, rates could begin to fall as the effects of the cut become more apparent.

“In the meantime, it’s still very much possible to get a loan – it may just take a little more preparation than it used to. As with all things finance-related, we advise consumers to seek independent advice before taking out a loan.”

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