Sub-six per cent loans could be a 'thing of the past'

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Sub-six per cent loans could be a 'thing of the past'

Thu 8th Feb 2007

Lenders are set to continue raising rates, paving the way for an end to sub-six per cent loans, according to the managing director of price comparison website Moneysupermarket.

Stuart Glendinning has said that the days of loans with rates below six per cent could be numbered due in part to the Bank of England base rate hike last month.

His comments came after new research conducted by financial information website Moneyfacts discovered that sub-six per cent personal loans were becoming rarer commodities.

Mr Glendinning said: "Rates are moving up and I can't see many providers coming back in below six per cent. The strange thing is that we have had three interest rate changes over the course of the last year and the beginning of this year."

Loans have been increased by eight lenders since the start of 2007, Moneyfacts says, and at present, just four loan providers are offering rates of six per cent or below on a loan of £5,000 over the course of three years.

Speaking specifically of the latest Bank of England rate spike, Mr Glendinning said that it could prove to be the "straw that broke the camel's back" in terms of loan rates.

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