Are lenders loosening their purse strings?

Interest rates on personal loans are finally starting to fall.

The average interest rate on the top ten loan deals has fallen to 8.35%, the lowest level since the Bank of England reduced the base rate to 0.5% last March.

When the Bank of England first lowered the base rate, mortgage and current account providers followed suit, while personal loan rates detached themselves from any connection with the base rate.

Despite the recent reduction in rates, many providers are still restricting personal loans to existing current account customers.

“Perhaps the tide is turning,” said Tim Moss of moneysupermarket.com, who published the figures.

“It has been a long time since there was much good news to talk about in the loans market, but the recent moves suggest lenders are willing to open their purse strings just a little wider.

“For those in need of credit for one reason or another, it might be time to have a look at personal loans again.”

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