The ever-rising British loan rates
- 21ST JUNE 2007
Banking has changed throughout the UK in recent years. Most of these changes have taken place gradually over the course of a few years, and most are also in the best interest of the public. However, there has been no other change as rapid as the rising of loan rates since the turn of the year, and this is most definitely not for the good of the consumer.
In 2006, it was possible to walk into at least two or three banks in every high street and apply for a sub-6% loan. Today, consumers would be fortunate to find a loan rate below 7%. Sub 6% loans actually encouraged consumers to borrow money and increased the customer bases of the majority of banks offering such a loan rate. However, as Britain gets further and further into debt, it is impossible to know how any individual consumer would benefit from such a rate or conversely be able to escape the clutches of debt at all.
Lenders and banks are in fact raising loan rates to try and limit any damage that may be inflicted when the Competition Commission conclude their investigations into payment protection insurance (PPI). Raising loan rates will in fact help to plug the financial hole left by enforced sales of payment protection insurance policies.
The need for payment protection insurance is therefore greater than ever, but anyone wishing to take out a policy should investigate all options open. Standalone insurance policies, like those offered by the ethical British Insurance, can in fact provide peace of mind without the fear of any backlash from the banks, and that can only be a good thing.
