22 August 2008
Rates on unsecured personal loans have increased by 1.3% in just over a year and could cost applicants £1.2 million more in interest, uSwitch.com has claimed. According to the independent price comparison site, average rates on personal loans of £8,000 over four years have risen from 6.1% APR to 7.4% APR in the last 13 months. One-year loans for £1,000 have seen the biggest rate increases, from 16.55% APR to 19.99% APR. Rates on both offline and online loans have risen, although the increase has been higher on offline only deals. The research also shows that just 26% of loans for £10,000 over five years have an APR of less than 8%, compared to 78% 13 months ago. Simeon Linstead, Head of Personal Finance at uSwitch.com, said the market for personal loans is "extremely volatile" at the moment. However, he added: "The market is vast and there are still competitive rates for those who take the time to compare the offers available." According to the accountants Grant Thornton, personal debt in the UK stood at £1.444 trillion at the end of June, up 7.3% over 12 months.