22 October 2007
UK providers have ramped up the cost of personal loans far beyond the recent base rate rise, a report from uSwitch has revealed.
Although the Bank of England decided in July to raise interest rates by 0.25%, the price comparison service's research shows that personal loan providers have in turn upped rates by around 1% in that time.
uSwitch also states that better deals are to be found by taking out a loan online, which have increased by just 0.2% since July - and now stand a full percentage point below the offline-deals average (7.7% to 8.7%).
Personal Finance Expert Mike Naylor commented: "The availability of the sub 6% loan is now just a distant memory - however, the market is vast and there are still competitive rates for those who take the time to compare the offers available."
The research also highlighted the increasing use among banks of so-called 'personal pricing' for loans - which uSwitch says can form a "smoke screen" for customers, charging extra for an individual rate and not advertising a typical APR for all.
Seven high street banks were found to offer 'personal pricing' services for offline loan purchases.
Mr Naylor added: "There are already huge variations in the loan rates available to consumers amongst both online and offline deals, throwing the personal pricing smoke screen into the melting pot is just causing further confusion."
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