Although unsecured personal loans are still incredibly popular, they may be more expensive than ever for consumers. To those that are in desperate need of an unsecured personal loan, this is a small price to pay, but for those that cannot afford the high rates of an unsecured personal loan, this is bad news indeed.
“It has always been the case that consumers borrowing small amounts of money tend to get stung with high APRs. Over the past 13 months, rates on these tiers have seen the biggest hikes. Overall, we wouldn’t encourage consumers to take out a loan for a small amount such as £1000. There are other forms of credit available such as the 0% Virgin credit card which will allow consumers to borrow £1,000 at 0% APR for a full 15 months,” stated Simeon Linstead of uSwitch.com
Darren Cook, at Moneyfacts.co.uk, stated: “Up until July last year the sub-prime market was a growing sector offering 8,148 sub-prime residential mortgage products compared with just 1,252 today.
“Many lenders realised that there was an ever increasing number of people with blemishes on their credit files. Existing lenders added sub-prime products to their range and there was an influx on new lenders offering exclusively sub-prime mortgages.
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