Monday, August 16, 2010
Category:
Secured Loans
According to Moneysupermarket.com, average rates for the ‘top ten personal loans under £5,000’ have reached a ‘ten year high’. In contrast, average rates for loans over £5,000 have reportedly started to fall following their peak in May.
Despite personal loan rates increasing since the early part of 2006, it was found that rates for personal loans over £5,000 have become ‘more competitive’ in recent months. In fact, it was revealed that the average ‘top ten’ rate now stands at 10.46 percent, down from 10.68 at the start of the year. Nevertheless, the comparison site’s research has shown that average rates for personal loans less than £5,000 have continued to rise, with borrowers now paying up to 135 percent more than they did four years ago.
Head of loans and debt at moneysupermarket.com, Tim Moss, commented: "The credit crunch has really impacted borrowers who are looking for smaller loans. Not only is it more difficult to get a loan, with many lenders tightening their approval criteria, those that do manage to get one will undoubtedly pay through the nose. Previously lenders kept their rates consistent with the Bank of England Base Rate, but since it dropped to a record low, banks have used this as an excuse to release the reins and increase the cost of lending massively.
"If you are financially stretched and in need of a loan, now is the time to play the banks at their own game and really use current provider rates to your advantage. By borrowing a bit more you can actually save yourself money without increasing the term or monthly repayments, which shows just how much the market has changed. As with all products it is vital to shop around to make sure you get the best deal and don't be tempted to borrow more than you can really afford to pay back."
……………………………………………………………………………………………….....
Homeowners who would like to tie up any existing borrowings, such as personal loans and credit cards, could consider taking out a
secured loan. One of many finance options, a secured loan to consolidate existing borrowing could leave borrowers with just one monthly repayment as opposed to juggling several. What’s more, this single monthly repayment could even be less than the sum of current outgoings, thereby leaving borrowers with more money each month. However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.
