Many consumers are being led to believe that the cost of personal loans is especially low at the moment, given the 0.5 per cent base rate, an expert has said.
Ed Bowsher, head of consumer finance at lovemoney.com, noted that data shows personal loan rates are currently at a ten-year high, so people need to think carefully before taking one out.
"The current average loan rate is 12.7 per cent which is very expensive in the current economic climate," continued Mr Bowsher continued.
He highlighted that "the more people understand this, the better", suggesting that this will alleviate debt pressure on people throughout the country.
Findings from Moneyfacts.co.uk show loan rates have been on the rise since May 2006, mainly because lenders have no guarantees that consumers will repay the money they have been lent.
It even suggested that banks may not prove the cheapest option for people hoping to borrow cash. |
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