Loan APRs will rise next year, predicts expert

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Loan APRs will rise next year, predicts expert

Tue 23rd Dec 2008

An expert has predicted that 2009 will see the rates of interest charged on loans (annual percentage rates, or APRs), rise on many loans rise because of the ongoing effects of the recession.
 
Tim Moss, head of loans at moneysupermarket.com, said that rising unemployment and the increasing squeeze placed on many people's disposable income would "inevitably" lead to more people defaulting on their loan payments.
 
He added: "The combination of more people defaulting on repayments and banks making less money from loan payment protection policies will inevitably result in increased APRs."
 
Mr Moss also believes that as loans become more scarce, banks will be able to "cherry pick" their customers, meaning that those with the best credit histories stand the best chance of being granted loans.
 
Earlier today, the head of moneysupermarket.com's credit cards division predicted that credit cards are also most likely to be granted to those with good credit histories.

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