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Loan rate trends revealed by Moneyfacts.co.uk

Unsecured personal loan rates are on the up, new research from Moneyfacts.co.uk suggests.

According to figures from the financial website, average unsecured loan rates have increased by 4.6 per cent in a year.

Those borrowing under £3,000 from mainstream lenders have been hardest hit by the rises - with the highest rate on offer increasing from 20 per cent to 28 per cent since last March.

Although personal loans of over £3,000 have increased less rapidly, the best rate available has nevertheless gone from 5.9 per cent to 6.7 per cent.

"Anyone looking to take out a loan in 2008 is going to find themselves faced with having to shell out more by way of monthly repayments than they would have done over the last couple of years," Moneyfacts.co.uk analyst Michelle Slade commented.

"The ongoing credit crisis has seen institutions concentrating on getting money in the door and becoming more expensive and selective when lending money out."

Moneyfacts.co.uk also pointed out that the secured loan market in the UK had tightened, with eight lenders having withdrawn their loans in recent months due to the credit crunch.

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