Money lenders in the UK are “running scared” of the effects of the credit crunch, one expert has claimed.
Interest rates have been rising on small loans as creditors look to avoid losing out as a result of the financial turmoil witnessed in recent months, according to Jo Roberts, a director of Needanadviser.com.
The impact of these rises is being felt by people with unsecured loans who are finding it more difficult to become debt free, Ms Roberts suggested.
She said: “The trend is for lenders to put their rates up so it makes it worthwhile for them.
“This is all the result of the credit problems going on in the world at the moment.”
Ms Roberts went on to indicate that lenders are likely to continue increase their rates on unsecured credit for at least the next 12 months.
Earlier this month, the Financial Services Authority suggested that the era of cheap credit in the UK is over.