Unsecured loan rates have increased significantly since 2009

Analysis of the unsecured loan market by independent financial research company Defaqto has found that since the base rate reduced to 0.5% in March 2009:

Average APRs for unsecured loans have increased across all loan amounts reviewed

The lowest rates available for unsecured loans have generally fallen

Defaqto data shows, for example, that the average APR for loans of £10,000 has increased from 9.8% two years ago to 11.2% currently, while the most favourable rate now available for this loan amount has reduced to 6.3% from 7.8% in March 2009.  The data shows that the lowest rates currently available are for loans of £7,500-£15,000.

David Black, Defaqto's Insight Analyst for Banking, said: "The current economic climate has made it extremely difficult for people to borrow.  Although on average we have seen unsecured loans become more expensive over the past two years, the good news for those with great credit ratings is that the best rates available are now lower.  This demonstrates that if people are proactive and prepared do their homework when looking for a loan, they could save themselves a substantial sum of money.  

"It is important to note however that some providers will only lend to existing current account customers.  In addition, someone's credit rating will have a major bearing on whether they are able to get a loan and, if they are able to, what interest rate will be applied - due to the use of personal pricing."