Research published in late November shows that interest rates on personal loans are coming down.
Consumers have been hit with increasing interest rates on loans over the past year or more. These have come despite the Bank of England reducing the base interest rate to the lowest ever level of 0.5 per cent.
Borrowers looking for loans of less than £5,000 have been most severely hit by these high interest rates, but all this may be about to change if new research from moneysupermarket.com is anything to go by.
Lenders, including Tesco, Sainsbury’s Finance and Nationwide have started to bring down their rates. In fact, the average rate for loans of less than £5,000 is now at the lowest level for 16 months, indicating a change in fortune for thousands of people that need some extra cash.
In April 2010, the interest rate for sub £5,000 loans peaked at 10.77 per cent. This average rate has now fallen by 0.58 per cent, indicating that lenders are once again keen to compete for new borrowers’ business.
Similarly, average rates for loans of £15,000 or more have fallen by 0.3 per cent, suggesting that the reductions are being rolled out across the board.
