Nice Loans.co.uk > News > Personal Loans outlook positive
Better prospects for cheaper Loans
Rates on personal loans have been increasing over recent months due to a mix of factors.
The two drivers for the more expensive loans we have been used to over the past few months have been the interest rate rises set by the central bank and the squeeze on credit availability in the financial markets.
Looking back to this time last year, the cheapest rates on personal loans were below the 6% figure, but now very few loans are advertised at rates lower than 7% and even those are only made available to the lowest risk borrowers.
However the state of various financial indicators could point to cheaper loan rates appearing in the forthcoming months. Firstly interest rates have remained stable for the past 3 months and there is concensus opinion that the Bank of England will reduce rates before the end of the year. There are also worries about a slowdown in the economy, which will only be made worse if the borrowing becomes more difficult. Also the outcome of the sub-prime mortgage situation in the US had made many lenders increase interest rates across the board in an attempt to cover themselves against the risks of loan defaulters. With some companies now choosing to amend their approval criteria rather than increase interest rates, the offers available for low risk borrowers could start to re-appear.
The fact that fixed rate mortgage rates have already started to come down is an encouraging indicator that loans could be expected to do likewise.
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