Three Personal Loan Providers Up Rates By 1.2%
on: September 18, 2009, 7:24 am
the start of September, three unsecured personal
loan providers have implemented rate hikes of up to 1.2% for
new customers. This product 'tweak', although seemingly small,
could cost personal loan customers an extra GBP322 in interest
paid on a typical loan of GBP10,000. With UK consumers currently
forking out GBP181 million in interest daily, this will only add
to an already hefty bill.
consumers struggle to manage their debts in the current climate,
their chances of consolidating to a low cost loan have also been
vastly reduced compared to this time last year. There are currently
36 personal loans available to consumers, this is compared to
57 loans that were available this time last year, a drop of 37%.
At the same time, the average loan rate has increased from 9.04%
to 9.08% in the last year.
Providers that have increased rates since the start of September
include: 1. Marks and Spencer Money - selected rates increased
Egg - GBP3,000 to GBP20,000 increased by 1% to 14.9%
Alliance & Leicester - GBP5,000 to GBP7,499 increased by 0.1%
to 8.9% and GBP7,500 to GBP15,000 increased by 0.8% to 8.7%
it seems the trend for offering the best deals to "brand
new customers only" does not currently extend to the unsecured
personal loans market, with the best deals currently being offered
to existing customers. The average interest rate in the Best Buy
table for existing customers is currently 7.94%, with Nationwide
topping the table with its Existing Customer Personal Loan Plan
at 7.7%. However, new customers can expect to be hit with an average
interest rate for a Best Buy loan of 8.08%, 0.14% higher.
Bond, personal finance expert at uSwitch.com,
comments: "As consumers struggle to make ends meet and manage
their finances, loan providers are looking to offer the best rates
to those who financial behaviour they can closely inspect - which
are their existing customers.
year 1.3 million consumers used an unsecured personal loan for
debt consolidation purposes. However, with the number of personal
loans available dropping by 37% this year and rejection running
high, it would be highly unlikely that a similar number of consumers
would be able to consolidate their debts this year. However, for
those that are thinking about or attempting to do this, it would
definitely be worthwhile finding out what rates existing providers
can offer, as it seems loyalty is one of the only aspects that
could win consumers better interest rates at the moment."
North, uSwitch.com on 0207 802 2915 or email@example.com
uSwitch.com is a free, impartial online and telephone-based comparison
and switching service, helping consumers compare prices on gas,
electricity, water, heating cover, home telephone, broadband,
digital television, mobile phones, personal finance products and