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.

Unsecured loans: an ultimate financial outlet

Unsecured loans are short term loans and can be paid off early. Maximum limit of borrowing is not more than £ 10,000 but this loan amount is subjected to change depending upon the circumstances. Your loan can get approved fast and you will get your cheque within couple of days. Borrowers will not have any nightmares of having their property sunk as compensation of default on payment.

Though the interest rates are higher, it will not be a matter of concern because you can save the interests if you pay off the principle amount and interest soon. Early repayment is very much possible because unsecured loans are short-term loans.

People with bad credit history can also avail

unsecured loansand it benefits them more than one way not only for getting their purpose solved but they can improve their credit rating by paying off promptly.

Obtaining unsecured loans are totally risk free proposition, as borrowers have nothing to offer as collateral. Nevertheless, you should be careful while making payments because lenders can recover their money by any means. And most importantly, if you are unable to pay off the loan, your credit rating will be damaged and it will be difficult for you to apply for a loan again for pretty long time.