Credit consumers ‘being hit by higher rates’

The price comparison site suggests that it is borrowers who take out smaller loans – amounts below £5,000 – that are suffering the greatest impact of interest rate increases and finding a debt solution more difficult to come by.

Furthermore, MoneyExpert.com insists that people with poor credit histories are being particularly stretched, citing figures showing that 60 per cent of the searches for smaller loan price comparisons on its website were carried out by consumers with “adverse” credit records.

Sean Gardner, chief executive of MoneyExpert.com, said: “The less well-off and those with poor credit records are being stung with higher charges for loans as banks and building societies cash in on rising interest rates.

“The fact that loan firms are focusing on keeping their big borrowing competitive suggests those looking for modest loans are seen as small fry.”

Personal debt management problems in the UK are rising and the overall debt now amounts to more than £1,325 billion, according to figures from Credit Action.