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Personal loan rate high 'no surprise'
News that personal loan rates are at a nine-year high is "no surprise", according to an expert.
Andrew Hagger of Moneynet.co.uk has claimed that the level of competition in the unsecured loan market has subsided due to high levels of unemployment and the impact it is having on a number of families.
He added that banks and building societies have also adopted a cautious stance, which means it is "no surprise that the appetite for unsecured lending has pretty much dried up".
"In January 2007 before the credit crunch took hold, personal loan rates were being offered at 5.8 per cent which was a mere 0.55 per cent above base rate at that time," he explained.
"Clearly with such ultra thin margins these rates were not sustainable and any defaults would soon wipe out the profit margin on the loan itself."
Moneyfacts released the research suggesting that personal loans are at a nine-year high, despite the Bank of England base rate standing at an all-time low.