- 26
- Aug
With the Bank of England’s decision to cut the base rate by a further quarter point, most consumers would be hoping that loan rates would be showing a drop. Sadly that isn’t the case.
According to comparison site, Moneyfacts, 14 lenders increased their loan rates last month, with Tesco and the AA raising them twice.
Whilst personal loans are the last thing on many people’s minds right now - with the credit crunch squeezing us tight we are looking to save rather than borrow - many people are hoping to consolidate.
With food and fuel bills climbing and not expected to drop any time soon, most people are looking at ways to lessen their outgoings. For many this means finding a way to reduce repayments on loans and other credit.
The traditional way of doing this was the debt consolidation loan, where all your existing credit deals were paid off and replaced by one loan. However, many borrowers have been shocked to find that the rates quoted for the new deal are just as much - or more - than their existing deals. And that’s with spreading them over a longer term!
However, the future is not all bleak: many economists have reported that the lack of liquidity in the market (that’s how much money lenders have to lend to you and me) is increasing, which should ease the rates in the near future.
So, whilst you might have to stump up on your existing loans for now, there should come a point soon where you can get a better loan deal and save yourself some money.
