As loan rates have continued to rise over the past year, borrowers can now expect to pay around 10.32 per cent APR for a £5,000 loan, moneysupermarket.com has revealed.
According to the price comparison site, the gap between the average loan rate and the Bank of England's base rate has now increased from 3.4 per cent last year to 9.8 per cent this year.
The figures show that borrowers can expect to pay around eight per cent for loans upwards of £10,000 which is an estimated one per cent increase on rates last year.
For instance, a £25,000 loan now has an average APR rate of 8.7 per cent compared to 7.7 per cent this time last year.
Reacting to this news, Tim Moss, head of loans and debt at moneysupermarket.com, said: "Despite the Bank of England slashing the base rate to 0.5 per cent in March, loan rates have continued to rise, leaving consumers paying through the nose for their personal loans. Borrowers looking for a smaller loan of around £5,000 will be hit harder than those looking to borrow more.
"We have seen a recent glimmer of hope as loan rates crept down slightly in August. Competition seems to be returning to the loan market which is great news for consumers – however lenders will need to continue reducing rates if they want to draw customers back, particularly those who want to reconsolidate their debt."
Meanwhile, research carried out by Moneynet.co.uk has found that the number of lenders has fallen by more than 50 per cent since August 2004 when there were 62 lenders compared to 29 this year.
Mr Moss said that as banks and building societies have become more cautious about who they lend to, it is becoming increasingly difficult for consumers to get a competitively priced loan.
He also urged borrowers to keep a close eye on the best deals, but to only apply for loans that they are capable of being accepted for, he added: "With lending criteria becoming more and more stringent, it's important to keep your credit record as clean as possible and not taint it with failed applications for loans."
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