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PPI Claim News - 16/12/2009

Loan Charges: Higher rates used to 'fund interest rate cuts'

While the Bank of England's base rate remains at an all-time low, personal loan rates continue to rise, leaving more people facing the possibility of suffering steep loan charges as they struggle with repayments.

According to, borrowers have been left to foot the bill for the massive cuts to interest rates which, it contends, were made to protect the economy from recession rather than helping consumers trying to borrow money.

Pierre Williams, head of research at the price comparison site, said that borrowers, and for that matter savers, are "paying the price" for the BoE's decision to drop interest rates to just 0.5 per cent, which is an historic low.

He added: "Personal loan rates were as low as five per cent before the financial crisis took hold.

"They have climbed since then and are likely to stay high into next year."

Mr Williams spoke following the publication of research by, which indicated that the average rate attached to the top ten personal loans for £5,000 has risen to 10.78 per cent, up from 9.24 per cent at the beginning of the year.

For help making a PPI Claim, Loan claim, PPI reclaim, or a credit card charges claim then call Belmont on 0845 526 0000 or fill in the Quick Claim box to be sent a PPI Claim form, Loan Claim form, PPI reclaim form or credit card charges form.ADNFCR-2776-ID-19517097-ADNFCR

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