Thrifty Loans

There has been some conflicting evidence recently about personal loans, and whether they are becoming harder to get for all, or whether it is the small percentage of the typical sub-prime market who are struggling to borrow money.

New research from data analyst Moneyfacts shows that personal loan rates are on their way up, and it is indeed harder to get a loan even if you do have a good credit rating. Some lenders have left the UK market completely (although some have also left France, Italy and Germany), GE Money, Liverpool Victoria and Leeds Building Society have withdrawn products over the past week, and other big-name lenders have pushed their rates up since the credit crunch began to talk hold in September.

The research from Moneyfacts shows that Bradford & Bingley is one example of a building society that has increased loan rates. Loan between £2,000 and £2,950 have gone up from 13.9% in July to 17% now.

Eskimo Loans – owned by stricken bank Northern Rock – has put its rate up on loans between £5,000 and £25,000 from 7.9% in July to 10.9% currently. The internet deal from NatWest on loans from £7,500 to £9,450 has risen from 6.9% to 8.9% in the same time period.

Even advertised good deals are not necessarily available to everyone. Moneysupermarket.com, the price comparison website, says that the rate of loan acceptance has fallen from around 66% in January of this year to around 50% in October.

Tim Moss, from Moneysupermarket, says: “People with near spotless credit records are finding it difficult to get a loan, or are being offered one at a higher rate. The banks are getting choosy.”

Your Personal Loan.co.uk, from the Cooperative Bank, tops the current best-buy charts. The rate of 6.7% on a £5,000 loan means that you would pay back £5,517 over three years. A loan of £10,000 would mean a total repayment of £11,740 over five years. However, such a deal will depend on your credit score.