Personal loan rates rise despite base rate cut

1 December 2008

New research shows that average interest rates on ‘best-buy’ personal loans have risen by almost half a per cent in the past two months, despite a 2% drop in the base rate in the same period.

The research by Moneysupermarket.com showed that the average best-buy loan rate has risen from 7.92% to 8.36% since the first week of September.

That means the gap between loan rates and the base rate has widened from 2.92% to 5.36%.

However, Tim Moss, head of loans at Moneysupermarket.com, suggested that rates on personal loans may come down after Christmas, when lenders may aim to attract people looking to organise their post-Christmas finances.

A loans expert for Think Money commented: “It’s no secret that interest rates on loans have not been coming down in the same way as mortgage rates – although lenders may be tempted to lower loan rates if the base rate falls further, as predicted.

“In the meantime, we urge anyone looking for a loan to seek professional loans advice. Speaking to someone who understands the market can greatly increase the chance of finding the best loan deal, which is particularly important in today’s market.”

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Tags: personal loans, loans, loan rates, loan, personal, loan advice

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