Northern Rock and Liverpool Victoria have both raised their APRs to above six per cent following this month’s base rate rise by the Bank of England.
The news could spell trouble for consumers seeking to borrow money without landing themselves in overwhelming debt.
Nick White, director of financial services at uSwitch.com, commented: “With inflation currently at the highest level in the UK for 15 years, interest rates at their highest since mid-2001 and another base rate increase anticipated in the very near future, it is likely that personal loan rates will start creeping up across the board, possibly resulting in the death of the sub-six per cent APR loan market over the next few months.”
He added that a consumer with an average credit card balance and average purchase APR of 17.02 per cent would take more than 37 years to repay the debt in full.
Research from unbiased.co.uk suggests that Britons’ savings habits are being “undone” by the current culture of debt.