Higher loan rates 'squeezing borrowers'
Higher loan rates 'squeezing borrowers'
Tuesday 19th August 2008
Finance site Moneyfacts.co.uk has calculated that the average repayment rate on a personal loan of £5,000 over three years in August 2006 was just under three per cent.
However, this has since soared as a result of the credit crunch and the average repayment rate now stands at 11 per cent.
Worryingly, Michelle Slade, an analyst at Moneyfacts.co.uk, predicts that as conditions worsen for banks, rates for consumers "could get much higher yet".
She added: "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.
"Currently on a £5,00 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."
Experts predict that increasing pressure on consumers' finances could spark a huge rise in the numbers of people struggling with a debt problem this year.
KPMG estimates that by the end of the year, one person will be declared insolvent or bankrupt every four minutes.
Is Debt causing you worry and stress? We can help
Related News
Higher energy bills piling pressure on consumers - 15/08/08
Millions of debt-hit Britons are unable to afford to pay higher energy bills, a poll from uSwitch
Millions of debt-hit Britons are unable to afford to pay higher energy bills, a poll from uSwitch
Higher living costs add to students' debt burden - 13/08/08
Soaring rents and higher living costs are adding to the debt burden faced by UK students, a new study has shown
Soaring rents and higher living costs are adding to the debt burden faced by UK students, a new study has shown
Credit card borrowers left high and dry by rate hikes - 12/08/08
Higher repayments on credit card debt have left millions of borrowers suffering a similar plight to homeowners, it has been claimed
Higher repayments on credit card debt have left millions of borrowers suffering a similar plight to homeowners, it has been claimed
Airline ticket prices set to climb - 12/08/08
A spike in the price of airline tickets will mean that foreign holidays are set to become increasingly unaffordable to millions of debt-hit Britons in months to come, it has been revealed
A spike in the price of airline tickets will mean that foreign holidays are set to become increasingly unaffordable to millions of debt-hit Britons in months to come, it has been revealed
Repossessions hit 12-year high - 11/08/08
More and more Britons succumbed to unmanageable mortgage debt during the first half of this year, with repossessions hitting their highest level for 12 years
More and more Britons succumbed to unmanageable mortgage debt during the first half of this year, with repossessions hitting their highest level for 12 years
News Article Search
Quick Apply