Consumers urged to shop around as personal loan rates surge
Figures from price comparison website, uSwitch.com, has found that lenders are continuing to increase their cost of personal loans with interest rates surging.
In the last month alone, personal loans from Black Horse, part of the Lloyds TSB group, have increased by up to nine percentage points, to 36.9%, according to uSwitch.
Prior to the hike, a consumer borrowing £2,000 over two years would have paid £632 in interest. At the new, higher rate, the interest figure would be around £857.22 – an increase of 35%.
According to uSwitch, as well as personal loans becoming more costly, they are also becoming elusive as just 52 loans are now available, down from 56 in the last month.
The news comes despite the fact that the Bank of England has lowered interest rates by three-quarters of a point to 5% since last September.
The Monetary Policy Committee (MPC) is to meet on Wednesday with an announcement on Thursday lunchtime, and many economists believe that a quarter point reduction is inevitable this month.
However, whether or not the reduction will be passed on to the consumer, is the question many will be asking.