Personal Loans Rate: Compare First!

by : amenda dorothy

As the lenders are either hiking up their interest rates or completely withdrawing their products from the market, getting the approval for an unsecured personal loan has become especially difficult within the past three months. As a matter of fact, within the last year, for every month that has passed, a loan provider has left the market.

Although the Bank of England has taken measures to ease the burden of the credit crunch by lowering the base rate twice since the begging of the crunch, the loan providers are still finding it difficult in justifying the lowered interest rates.

For example, the average APR during July, prior to the crunch was 6.6%, compare this to the current average of 7.34% and it is easy to see the effect the credit crunch has had.

It is down to the high interest rates on the money-markets, where banks obtain funds for backing up their borrowings.

Various financiers are now taking consumers credit ratings into account more so than they where this time a year back. This scenario has dramatically widened the gap between those who were approved or disapproved because of their credit rating over the last year.

Considering all of the above mentioned facts, if you are on the look out for a personal loan of 20,000 pounds or more though, you may actually find it works out cheaper than it would have been a few months ago. With the typical interest rates for such loans dropping by 0.1%, these loans are now easy to avail.

One of the major degrees that the banks are taking to combat their losses is by offering high interest savings accounts, which is beneficial for the banks and the savers. That is why the customers are getting a decent return on their savings at the end of the savings term and the bank will have more funds to offer the finance within their means.