Personal loan costs 'rising for consumers'
30.06.2008
The cost of a personal loan has risen considerably and it may mean low-rate loans are a "thing of the past", a new report warns.
Analysis undertaken by Moneyfacts notes a personal loan of £10,000 taken out over a period of five years will now cost £423 in total more than borrowing the same sum two years ago.
The website warned this could be an "unwelcome" development for consumers already struggling amid the credit crunch.
It noted demand for personal loans is rising because people are seeking to consolidate their debt.
"Lenders are tightening criteria and those that can get a loan are finding they have to pay a much higher price," the website added.
Earlier this month, Defaqto warned the rejection rate for unsecured loans is currently higher than it has been for years.
It stated that many credit providers are now seeking "better quality business" rather than gaining as many customers as possible.
Analysis undertaken by Moneyfacts notes a personal loan of £10,000 taken out over a period of five years will now cost £423 in total more than borrowing the same sum two years ago.
The website warned this could be an "unwelcome" development for consumers already struggling amid the credit crunch.
It noted demand for personal loans is rising because people are seeking to consolidate their debt.
"Lenders are tightening criteria and those that can get a loan are finding they have to pay a much higher price," the website added.
Earlier this month, Defaqto warned the rejection rate for unsecured loans is currently higher than it has been for years.
It stated that many credit providers are now seeking "better quality business" rather than gaining as many customers as possible.