Skip to content

Over the past 2 years there has been a big rise in interest rates for loans.

It has been revealed that within the past two years of Britain’s financial crisis and recession, banks have hiked interest rates on personal loans during our economic downturn, meaning personal car loans and other large purchases have been increased by hundreds of pounds.

It has been revealed that within the past two years of Britain’s financial crisis and recession, banks have hiked interest rates on personal loans during our economic downturn, meaning personal car loans and other large purchases have been increased by hundreds of pounds. The cost of borrowing a loan has ballooned by 42 per cent due to the banks needing to deject bad debtors.

The personal finance group Defaqto has shown that the average (APR) on a £5,000 loan has gone from 9.8% to a high 13.9% over the past two years. This rise has affected people who wanted to secure a personal loan to buy a new car, the cost of doing so is now a lot higher than it once was.

Despite the Bank of England reducing interest rates from 5.25% to a 300-year low of 0.5%, the high street banks and building societies have increased their rates to reduce their overall debt that is currently littered across their balance sheets.

This means securing a car loan is indeed still a viable option, but be aware that doing so may cost you more than it once would.

Posted by on

Back to March 2010

Back to top