Getting cash advance loans: the lastest situation
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Unsurprisingly given the global financial situation, banks are proving increasingly reluctant to lend money. Rates for cash advance loans have increased by 9% in the past four weeks.
Eight providers have increased their rates while the number of loans available has dropped from 56 to 52, according to the price comparison site Uswitch.com
Black Horse has increased rates by up to 9 per cent, so loans of between £1,000-£2,999 now cost up to 36.9 per cent. For loans of £5,000-£7,499 the rate is 25.9 per cent.
The increase highlights the growing reluctance of lenders to offer money in an increasingly uncertain economic climate.
Interest rates on personal loans are at a seven-year high, according Moneyfacts, another personal finance website.
Others that have increased cash advance loans rates in the past 28 days include Bank of Ireland, Bradford & Bingley, Lloyds TSB and Marks and Spencer.
In contrast, banks are boosting saving rates with many, including West Bromwich, Kaupthing Edge and Manchester Building Society offering more than 6.5 per cent. Fixed rate bonds from the likes of the AA, and the Indian bank ICICI, top 7 per cent.
Personal loan ‘best buys’ are changing every day which demonstrates just how unpredictable and volatile the current climate really is.
The best loan at the moment for £10,000 over five years is from Yourpersonalloan.co.uk which offers a rate of 7.6 per cent. The repayments would cost £200.76 a month.
As ever, the advice for those seeking a loan is to shop around to find both the lowest rate of interest and a company that best fulfills personal circumstances.
However, borrowers should always remember that adding payment protection insurance (PPI), which is often sold alongside a loan, will make the loan even more expensive. Repaying £5,000 on a Barclaycard loan would cost £155.71 a month without insurance, or £179.11 with cover.
PPI has been heavily criticised, by both me and more eminent financial experts, for being overpriced and riddled with exclusions. Which?, the consumer group, says that a third of borrowers who have taken PPI with a loan would be unable to claim on the policy.
It is a fallacy that in the current climate getting a loan is impossible. It just means that potential borrowers have to be well informed, understand the pressures on banks and, most of all, be realistic in their expectations.
