According to the latest Moneyfacts UK Unsecured Lending Trends Treasury Report, the average rates for an unsecured personal loan rose between June and September 2022
The cost of unsecured borrowing via consumer loans and credit cards is starting to rise, new data has found.
According to the latest Moneyfacts UK Unsecured Lending Trends Treasury Report, the average rates for an unsecured personal loan rose between June and September 2022. The average rate on a £7,500 loan is now at its highest point in over six years.
Meanwhile, on credit cards the average purchase APR has reached a record high. The report found that between the start of June and the start of September 2022 the average purchase APR reached 29.6 per cent – the highest rate since records began in June 2026.
Moneyfacts said that a combination of interest rate rises and the size of fees on new cards launched all contributed to this rise.
In the midst of a cost of living crisis there has been a rise in the cost of borrowing for new applicants on unsecured loans across several tiers, with some average rates hitting their highest levels in over six years, said Rachel Springall, finance expert at Moneyfacts.
Consumers who need to borrow over the short-term will find interest rates on credit cards rose during the third quarter of 2022 and that introductory interest-free terms fell on both purchase and balance transfer cards.
Managing debts and spreading the cost of any large purchases in the months to come is crucial, she added.
She said: As the cost of living rises it is vital consumers keep up with their repayments and switch deals if they are being charged interest if they can. It is wise consumers check their credit score before they make any applications for a loan or card and seek advice if they are struggling with their debts.
The average rate on a £7,500 loan now stands at 5.6 per cent – a 1.2 per cent year-on-year increase.