Banks ''don''t want to lend''
26 August 2009
Cheap loans for British consumers may be a thing of the past, according to one expert.
According to research commissioned by Moneysupermarket.com , the average interest rate offered in the current market on a personal loan is 10.32 per cent. This is despite the Bank of England maintaining the base rate at a mere 0.5 per cent.
Pierre Williams, head of research at MoneyExpert.com, believes that lenders are not looking to be competitive with loan rates.
He said: "There''s… some suggestion that some lenders are deliberately looking to price themselves out of the market. Basically they don''t want to lend because they believe it is too risky.
"The days of cheap loans are long gone."
He went on to note that rates are likely to remain high as financial establishments attempt to build up a margin to guard against defaulted payments as the spectre of unemployment looms over the economy.
According to the Moneysupermarket.com data, customers who are looking for loans of £5,000 will find the highest interest premiums being offered.
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