Loan rates continue to climb

Samantha Owens, Head of Personal Finance at Moneyfacts.co.uk, comments: “This past year has seen a raft of rate increases and this has gradually been filtering through into the personal loan market. In just the last 14 days eighteen lenders have increased loan rates by as much as 4%.

“In most cases the increase has affected larger loans, typically over £5K

“These large and continued rate rises reflect the way that rising bad debts and increased base rates are hitting the personal loan market. Whilst rates are still lower for larger loans, particularly in comparison to mortgage lenders SVRs, you need to shop wisely to ensure you are getting the best deal.

“Make sure you get the best deal for your circumstances. Remember, many rates quoted are typical, so you may be offered a higher rate. Opting for deferred repayments at the start of the loan may sound attractive, but remember its just extending the term of your loan and increasing your interest bill in the process. Most importantly, check out the price of any insurance your opt for, as far cheaper and more flexible insurance can be purchased from independent providers.”