5 November 2008
A Labour MP is seeking an end to higher interest rates on personal loans and other forms of unsecured credit to prevent people falling into debt. Jim Devine, MP for Livingston, wants to ban loan companies from charging extortionate rates and is calling for the introduction of a cap, the Glasgow Daily Record reports. He claims some lenders are charging interest rates of up to 183% and expressed concern that over-stretched families may be tempted to take out such loans as they struggle to fund Christmas. "Many people getting these loans are desperate to escape loan sharks, but the interest rates they are being charged by legal lenders are almost as much. At a time of the credit crunch, it's time to crunch the credit charges," he remarked. Mr Devine believes personal loan rates should be capped at 5% above the Bank of England base rate, which currently stands at 4.5% and is predicted to fall again this week. Last month, uSwitch.com found that interest rates on personal loans were continuing to rise, despite October's half percentage point cut in the base rate.
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