Unsecured personal loan rates on the rise

The rate of unsecured personal loans appears to be on the rise, reaching a nine-year high, in spite of the Bank of England base rate being the lowest it has ever been.

This is according the latest statistics from Moneyfacts.co.uk and spokeswoman for the company Michelle Slade noted that this could be put down to the fact that the market is so “risk adverse”.

“Lenders are only offering loans to the most creditworthy applicants and then at a premium,” she said, adding that unsecured debts are the first to go unpaid when people are finding it hard to make repayments.

Ms Slade recommended that borrowers ensure they shop around in order to find the best deals available, although they must remain cautious regarding the number of applications they make “as this will reduce their chances of being accepted”.

This follows recent comments from Moneysupermarket.com’s Tim Moss, who stated that good credit scores are essential for 2010 and Britons should monitor their ratings in order to ascertain how likely they are to be approved for financial products.

By Sarah Adie