The APR on loans decreases

According to information of Moneysupermarket.com, last week the loans average interest rate decreased for the first time in seven months.

In March 2008 average annual percentage rate (APR) of the key loan providers amounted to 7.34% and since that time it has been constantly rising until it has reached it’s peak of 8.88% , which happened in spite of a session of Bank of England’s base rate cuts up to 0.5% . But because of these low base rates last week the average annual percentage rate (APR) on loans finally dropped and fell 0.2 percentage points to 8.68%.

Really, this rates fall is great event for consumers, as over the past weeks certain loan providers have reduced their loan rates and some of them developed more modern and inexpensive products to attract new borrowers. But even with cutting the APR banks will keep the log rolling and continue to exercise caution in accommodating with loans. And it will be even harder for consumers to get loans then in days of APR peak. It is obvious that providers have raised prices to get back their profit missed because of the clampdown on the sale of payment protection insurance. And if they want if they want to attract more borrowers, they will have to reduce rates and it will be possible to get a competitively priced loan.


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