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'Staggering jump' in unsecured loan rates
Interest rates for unsecured loans have almost doubled in the past two years, according to new research.
Comparison site Moneyfacts.co.uk found that the average rate has soared by 44 per cent since 2007, despite the dramatic cuts to the Bank of England base rate.
Customers looking for a unsecured loan of £5,000 are now faced with an average rate of 12.4 per cent, compared with 8.6 per cent two years ago.
Moneyfacts.co.uk analyst Michelle Slade said the rise in rates means that borrowers could actually end up paying more.
"With many providers showing just typical rates, the actual increase a customer has to pay compared to a few years ago could be much higher," she added.
In light of the research, Moneyfacts.co.uk encourages consumers to shop around to find the best rates, rather than just accepting the first offer from their bank.
Earlier this month, the Bank of England made the decision to hold interest rates steady after six consecutive monthly cuts from October 2008 saw the rate fall from five per cent to 0.5 per cent.