Loan and credit card rates ‘can vary greatly’

Consumers looking to take out loans, credit cards or overdrafts have been advised that there can be large variation in the amounts that borrowers are charged.

Principal consultant of banking at Defaqto David Black explained that the best deals are sometimes only available to people with good credit records.

He added: “As an individual’s credit worthiness deteriorates, it becomes increasingly difficult and, when available, more expensive to borrow.”

Mr Black noted that lenders are increasingly making their pricing decisions based on risk in today’s economic climate, with property ownership, employment, previous debts and past behaviour all becoming more important.

“Lenders are understandably selective about who they will lend to and turn down,” he stated.

Mr Black’s comments may be useful for those seeking loans, possibly as a form of debt consolidation.

Meanwhile, Neil Munroe, external affairs director at Equifax, has said that the use of debit cards is rising as people look to spend the money they have actually got rather than getting into more debt.

By Jamie Price