Small Personal Loans Just Got Bigger!

Interest rates for small personal loans have increased this year but those borrowing large amounts over £20,000 can find very cheap loan rates.

Since January 2008, an unsecured loan of £2,000 has risen by a around 0.8% which adds £40.00 to the total cost over a 3 year repayment period. £3,000 has increased by 0.5%. But if you borrow more than £20,000 rates have dropped. Three months ago, the average for this amount was 8.1%, and has fallen to 8%.

Financial data expert Moneyfacts, says: `The ongoing credit crisis has seen institutions concentrating on getting money in the door and becoming more expensive and selective when lending money out.`

This increase in loan rates is even bigger when you compare with a year ago when the Bank of England base rate was the same as now.

The rate on a £1,000 loan has increased by 4.6%, while 3.9% and 3.8% have been added to loans of £2,000 and £3,000 respectively.

Even loans of more than £20,000 have seen increases of more than 1%.

The best borrowers with good credit scores can still get some decent personal loan rates.

Our suggestion is always shop around for the best loan deal.