Consolidation loans 'becoming more expensive'

31/07/2008

Unsecured loan rates have been put up once more by providers, Moneyfacts.co.uk has said.

The financial website said yesterday that selected rates from Abbey have been increased by up to five per cent, while Intelligent Finance and Direct Line have upped repayments on some deals by two and 1.5 per cent respectively.

This upwards trend could mean that many households looking to merge all of their existing debts in to a single consolidation loan will have to pay more to do so.

EuroDebt director Kevin Still commented: "In the last week we have seen all the short-term tactics used by consumers in debt being tightened, rising transaction charges on credit card purchases, inability to release equity through re-mortgage or secured loans and now significant rises in borrowing costs for consolidation loans.

"Belt - tightening is tough when most of the cost cutting is only covering rising energy and living costs - consumers need to look at longer-term debt solutions where borrowing more now is not an option."

Moneyfacts.co.uk analyst Esther James added that the hunt for the best-value loan deal had become more important than before.

"Anyone looking to consolidate their debts needs to make sure they shop around," she advised.

Tags; Debt Management and Banking, Budgeting Advice, Credit Card Lifestyle,

• Share
• 
• 
• Store
• 
• Follow
•