Financial loan rates 'unfair'
The average interest rate expected to be paid by consumers on personal loans has risen to around ten per cent - an unfair level, according to one website.
In a study of the average level of interest applied to financial loans over the past four years, moneysupermarket.com found that borrowers can expect to pay a typical 10.32 per cent rate for figures of £5,000.
This is a premium of nearly ten per cent on top of the current all-time low Bank of England base rate and an increase of more than four per cent in the past four years.
August saw a slight drop in financial loan rates however, and the website claims that this could be a "glimmer of hope" for those needing to borrow money in the tough economic climate without fear of falling into debt.
Tim Moss, head of loans and debt at moneysupermarket.com, said: "Competition seems to be returning to the loan market which is great news for consumers; however lenders will need to continue reducing rates if they want to draw customers back, particularly those who want to reconsolidate their debt.
"Banks and building societies are more cautious about who they'll lend to than in pre-credit crunch days, which has made it much harder for consumers to get loans," he added.
When nearly 60 new registered cars are released at the beginning of next month, it is expected that more financial loans will be taken out to help customers afford the vehicles.
Andrew Hagger, from Moneynet.co.uk, wrote in the Independent that many financial loan providers have upped the competition this week in order to cope with demand for the products.
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