Lombard Direct and AA Loans become more expensive, says MoneyExpert.com

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Lombard Direct and AA Loans become more expensive, says MoneyExpert.com

Thu 4th Dec 2008

MoneyExpert.com has released research which shows that two loans providers, AA Loans and Lombard Direct, raised the rates of interest on their cheapest loans on a day when the Bank of England significantly lowered interest rates.

According to the price comparison site, this morning Lombard Direct raised the rate of interest on one loan from 7.8 per cent to 8.3 per cent, while AA increased theirs from 8.5 per cent to 9.4 per cent.

The Bank of England announced a one per cent cut in their base interest rate today.

Sean Gardner, director of MoneyExpert.com, said: "At a time when the Bank of England is cutting rates to historic lows, some lenders are hiking rates."

Mr Gardener accused the government of "failing to notice that the loan industry has continued to charge higher and higher costs".

This morning the government moved to make the banking code of conduct legally binding, which would mean that banks that are acting unfairly could face potentially unlimited fines.

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