Unsecured Personal Loan Rates up by 44%

Borrowers looking for an unsecured personal loan have seen rates jump by up to 44% in just two years.

Those looking for a £5,000 loan have been hardest hit as the average rate jumped from 8.6% in May 2007, to 12.4% today.

Michelle Slade, analyst at Moneyfacts.co.uk, commented: "Despite bank base rate being at an all time low, borrowers looking for a personal loan have seen no benefit.

"Those looking for just £5,000 have seen a staggering jump in the cost of a loan.

"In May 2007 a customer would have paid £664 interest on a £5,000 loan over a three year term, where as today that has jumped to £957.

"With many providers showing just typical rates, the actual increase a customer has to pay today compared to a few years ago could be much higher.