http://www.telegraph.co.uk/finance/p...s-to-30pc.html
Those applying for personal loans this month will find that interest rates have soared and the number of products available has halved since January.
At the beginning of the year consumers looking to borrow £5,000 for purchases such as a car or holiday could choose from 105 loans, compared with just 57 this month, according to research by comparison website MoneyExpert.com.
The company also found that the interest charged, expressed as an annual percentage rate (APR), on the loans still available had trebled over the same period. In January the average interest rate on a £5,000 loan was 10.65pc, compared with 29.4pc this month.
This is in stark contrast to the Bank of England base rate, which was at 5.5pc at the beginning of the year but now sits at 2pc, the lowest it has been in over half a century.
But rising levels of unemployment, with the figures at their worst in 11 years, have made banks wary of lending money they are less likely to see repaid and there has been an increase in subprime loans in recent months.
Sean Gardner, chief executive at Money Expert, warned that the situation was unlikely to change soon.
"The banks and other financial institutions are not keen to lend and until economic prospects pick up and the threat of widespread unemployment recedes, we're unlikely to see the return of cheap credit while loan providers re-evaluate the risks the are willing to take on," he said.
One area where there has been growth is the number of high-interest loans for those who are less financially secure, such as those with a poor credit rating. There are currently six loans with rates of between 14pc and 24pc and five loans charging between 50pc and 70pc interest.
Those applying for personal loans this month will find that interest rates have soared and the number of products available has halved since January.
At the beginning of the year consumers looking to borrow £5,000 for purchases such as a car or holiday could choose from 105 loans, compared with just 57 this month, according to research by comparison website MoneyExpert.com.
The company also found that the interest charged, expressed as an annual percentage rate (APR), on the loans still available had trebled over the same period. In January the average interest rate on a £5,000 loan was 10.65pc, compared with 29.4pc this month.
This is in stark contrast to the Bank of England base rate, which was at 5.5pc at the beginning of the year but now sits at 2pc, the lowest it has been in over half a century.
But rising levels of unemployment, with the figures at their worst in 11 years, have made banks wary of lending money they are less likely to see repaid and there has been an increase in subprime loans in recent months.
Sean Gardner, chief executive at Money Expert, warned that the situation was unlikely to change soon.
"The banks and other financial institutions are not keen to lend and until economic prospects pick up and the threat of widespread unemployment recedes, we're unlikely to see the return of cheap credit while loan providers re-evaluate the risks the are willing to take on," he said.
One area where there has been growth is the number of high-interest loans for those who are less financially secure, such as those with a poor credit rating. There are currently six loans with rates of between 14pc and 24pc and five loans charging between 50pc and 70pc interest.
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