The average interest rates that people pay on loans has increased over the last couple of years, those considering an individual voluntary agreement (IVA) have been told.
Personal loans of £5,000 have experienced an increase on their average interest rate of more than 16 per cent over the past two years, according to Sainsbury’s Finance.
Research showed that personal loans now have an average interest rate of 12.45 per cent APR, compared to 10.67 per cent APR two years ago.
Those considering an individual voluntary agreement will be interested to learn that many lenders have upped the interest rates on loans of £5,000 plus.
Steven Baillie, of Sainsbury’s Finance, said: "Our analysis highlights the great fluctuation in the personal loans market and the importance of shopping around. The past two years have seen a big increase in published interest rates for £5,000 loans."
In June 2008 personal debt in the UK was £1.4 trillion, the Independent has said.