The credit crunch is beginning to affect peoples' lives. Increasing numbers struggle with bad credit, making personal loans inaccessible. The more surprising news is that those with perfect credit are now finding that borrowing costs are rising.
Evidence of Rising Mortgage, Credit Card and Personal Loan Rates
The Bank of England has reduced interest rates by 4% in the last few months, yet the cost of borrowing is rising for many people who were hoping to consolidate debt.
According to Moneysupermarket.com, "The average rate a borrower pays on a £5,000 personal loan has risen from 7.92% in the first week of September to 8.44% now." This means that the difference between Bank of England base rates and the rate offered by the average lender currently stands at 6.44%. It stood at only 2.92% just a few months ago.
