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Mainstream Lender Unsecured Loan Rates Rise

Unsecured Personal Loans

Unsecured personal loan interest rates have risen by up to 1.2% for three unsecured loan providers. This amounts to an extra £322 in interest payments for a loan of £10,000.

This rise in borrowing rate has come at a difficult time as consumers struggle with their debt, making debt consolidation more expensive with some providers.

The three mainstream providers, Alliance and Leicester, Egg and Marks and Spencers Money, raised their rates as of 1st September.

The personal loans market has declined over the last year with just 36 loan products available at this time compared to the 57 that were available at the same time last year.

Despite the historically low base rate set by the Bank of England the drop in loan products available and the slight rise in loan rates is putting pressure on consumers looking to consolidate their debt. (more…)

FSA Cracking Down On Mis-sold Payment Protection

The FSA asked lenders on Tuesday to identify and compensate customers that have been mis-sold payment protection insurance as part of a crackdown on bad sales practices in the industry.

The FSA have asked companies to examine PPI contracts sold directly to consumers alongside an unsecured personal loan from after July 2007 for evidence of mis-selling, and compensate affected customers.

Lenders will also have to reopen 185,000 previously rejected customer complaints about PPI.

“This is the last chance for the industry to show that it can act fairly, consistently and in the best interest of consumers on PPI,” said Jon Pain FSA managing director of retail markets in a statement.

“All firms operating in this sector should take note and where necessary get their house in order.”

The first half of 2009 saw PPI, typically sold alongside consumer loans, top the charts of the most complained about product, the Financial Ombudsman Service sstated earlier this month.

To find out if you were Mis-sold Payment Protection Insurance and to claim compensation click the link.