New research has found that the average APRs for unsecured loans have increased significantly since 2009.
Independent financial research company, Defaqto, found that the lowest rates for available unsecured loan rates have generally fallen.
For example, the average APR for loans of £10,000 has increased from 9.8% to 11.2% in the last two years. Lenders may be taking advantage of cash strapped Brits who need financial support during these tough economic times. The recession has made it harder for to people to borrow against their assets and many have turned to unsecured loans as a consequence.
However, the most favourable rate now available for this loan amount has reduced from 7.8% to 6.3% since March 2009. This may be because the base rate has remained at an all time historic low of 0.5% since March 2009.
The research reveals that the cheapest rates available for loans are those between £7,500 and £15,000. Now could be a good time to borrow as experts predict that the interest rate will remain low well into 2012 and possible even 2013.
David Black, Defaqto's Insight Analyst for Banking, said;
"The current economic climate has made it extremely difficult for people to borrow. Although on average we have seen unsecured loans become more expensive over the past two years, the good news for those with great credit ratings is that the best rates available are now lower. This demonstrates that if people are proactive and prepared do their homework when looking for a loan, they could save themselves a substantial sum of money.
"It is important to note however, that some providers will only lend to existing current account customers. In addition, someone's credit rating will have a major bearing on whether they are able to get a loan and, if they are able to, what interest rate will be applied - due to the use of personal pricing."
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