Research carried out for The Independent by personal finance group Defaqto found the average annual percentage rate (APR) on a £5,000 loan has soared to 13.9% from 9.8% in the last two years alone.

Financial advice website, Moneyfacts, recently revealed that during the same two-year period, lenders increased their APR on credit cards to over 18% - the highest level since 1998.

According to many experts, providers are passing on the cost of a rise in defaults - reflected by the squeeze on British households due to rising unemployment.

Defaqto’s David Black, said: “Many of the banks are focusing their unsecured lending on existing customers; so to get an unsecured loan or credit card from HSBC or RBS you now have to have a current account with that provider.”

Mr Black adds: “The absence of PPI sales income is one of the main factors behind the rise in unsecured loan rates. The banks used to make a big profit from selling payment protection insurance in conjunction with unsecured loans, but this income stream has reduced substantially.”

Loan alert: personal loans charging 8pc or less

A personal loan from Nationwide is reported as the cheapest, with a loan rate of 7.9% offered to existing Nationwide customers (though not those with existing loans).

The AA also offers a decent rate of 8% with fewer restrictions than other lenders, and also can offer a payment holiday under some conditions.

Alliance and Leicester also offer a rate of 8%, but the Telegraph reports that this is only available through comparison websites. Does this mean this is due to cash back from commission rather than being a direct A&L product?

Sainsburys Finance also offers a good rate of 7.9%, but it’s very conditional - you have to have a minimum term holding a Nectar card to secure this rate, and also apply online. You also need to borrow a minimum of £5,000, which is higher than other lenders. Otherwise, their normal rate is 8.1%.

Overall, it’s actually pretty sad to see the loan rates so high, especially when the Bank of England interest rate stands at 0.5%, and with interbanking Libor rates at 1%. That means the spread on profits from loans stands at the highest in recent history.

On the one hand, perhaps banks will argue it allows them to recapitalise better, but on the other, with rising defaults, there may be a nasty trade-off on the profits.

Nationwide’s new personal loans rates

With effect from Thursday 2 April 2009, Nationwide Personal Loans will offer a competitive rate of 8.2% APR typical for loans of £7,500 to £14,999*. With this typical rate, Nationwide remains lower than all high street banks and offers the same low rate across all three channels – branch, telephone and internet**.

# The rate offered will depend on the amount borrowed and the customer’s personal circumstances.
# Nationwide Personal Loans are available for any amount between £1,000 and £25,000.
# Repayment term is between one and seven years.
# There are no upfront charges or arrangement fees.
# All loans are subject to status and are available to those aged 18 or over only.
# Apply in branch, by telephone - 0800 30 20 10 - or online (where a decision can be made in minutes)

Polititions are among the most critisised people in the world, although I don’t think anybody except the banks will be disagreeing with their comments of late.

They are suggesting that banks are made to cap their interest rates relating to personal loans, which have spiralled out of control over the past few months, some standing as high as 28%.

Cap interest rate charges

A cap on the interest rates charged by banks for personal loans is needed, says expert.

A politician has called for a cap on the interest rate charges levied by banks when consumers take out their personal loans.

While it does seem that money is being injected into the car industry left, right and centre, it does not seem like the money is in big enough volume to deal with the current financial struggle that most companies within the motor industry have found themselves in.

Union leaders continue to defend the fact that the UK Motor Industry isn’t on the verge of collapse, but that is questionable.

Car industry needs more loans

UNION leaders have defended their claims that a major UK car plant is on the brink of collapse after the Government accused them of destabilising the industry with ‘rumours’.

Joint Unite union leader, Tony Woodley, warned on Friday that an unnamed plant faces imminent failure unless the Government steps in with an injection of funds.

While I am sure most couples would want to take the option below and fast track their way to their wedding, there is always a good feeling about saving up for at least a large proportion of the cost. Wedding loans are good if the main funding is in place.

Personal Wedding Loans

Once couples have decided to get married they want to get planning as soon as possible without having to save up and wait for years. There is now a solution in the form of a wedding loan from the Personal Loans Center:

Customers can borrow from £500 to £15,000 to fund the wedding of their dreams. With the average UK wedding costing approximately £10,000 a wedding loan takes away the financial headache and allows customers to start planning their big day right away, while making repayments in manageable monthly installments.

We have all had it, bills on there way, or a car that needs fixing urgently, but you don’t get paid for another 14 days. An instant loan is any easy way to solve these problems, although once you open your first loan, you may change your strict way of financial thinking and end up in arrears, so be careful and pay it back as soon as possible.

Instant easy loans

Instant loans as the name suggests are made available to the borrowers within a short span of period say within 24 hours. Therefore, it can be said that these loans are designed to help borrowers in sudden emergencies which comes without any notification. In fact, borrowers with bad or poor credit problems such as CCJs, IVA, arrears, bankruptcy, defaults etc against their name can apply for these loans. The borrowers enjoy same terms and conditions which are offered to good credit borrowers. As a matter of fact, these loans are approved without credit check.

To access the loans, borrower should be a permanently employee for at least 6 months with a good source of monthly income. The borrower should possess a bank account which must be 3 months old. Not only this, borrower must be the UK citizen with minimum age of 18 years. For quick transfer, the borrower must possess active bank account.

Our country has spiralled way out of control over the last few years, with people finding it easier to apply for a small to medium sized loan rather than get a few extra shifts at work or a part time job. Those times are hopefully over, well, they have to be for the future stability of the financial economy.

Bad debt and unsecured loans

Is your bad credit tag creating problems in loan approval? Require funds for catering various needs? Looking for external source of finance but have nothing to place as security? Then applying for bad credit unsecured loans will be the right option for you.

For bad debt unsecured loans you need not place any security. Those who are having blemished credit history can easily apply for these loans. Borrowers with adverse credit scores and bad credit like CCJs, IVA, arrears, defaults, late payments and bankruptcy are all acceptable without any restriction.

If you are facing unavoidable expenses and required to have an instant access to cash then it is preferable to opt for instant loans. These loans are well-known in the financial market for their quick approval rate. Borrowers find easy to meet their sudden urgencies like paying credit card bills, car accidental bills, paying education fees, small home renovation, wedding expenses, unwanted travel expenses etc.

Cash loans are an unsecured way of people requiring funds to obtain a loan without putting down property as a form of security. They are available to all UK citizens, as long as they pass credit checks and are over the age of 18.

Cash loans

The cash loans are crafted with intelligence for the people of UK. The policy of cash advance intends to assist the applicants financially. It directly supports applicants to materialize their urgent and unavoidable ends. Therefore, it can be said that these cash loans UK are well defined as the financial benefactor for United Kingdom citizens.

The cash loans are unsecured form of loan as applicants need not have to place collateral to fulfill the desired eligibility. To avail these loans, borrowers have to meet desired qualifications such as applicant must be a regular employee with current and valid bank accounts. Importantly, the applicant must be the UK citizen with at least 18 years of age.

It is good to see that the financial world is finding some security within the fact that Chancellor Alistair Darling took the initiative to suggest setting up a bad bank. Whether this is actually the correct decision; only time will tell.

Darling’s bank talks

Chancellor Alistair Darling’s suggestion that the government may set up a “bad bank” to buy up toxic assets from financial institutions seems to have gone down well in the market.

Royal Bank of Scotland has risen 0.8p to 21.4p - a near 4% gain - while Lloyds Banking Group was lifted 4.5p to 93.2p, Barclays is 3.7p better at 96p and HSBC - which has always maintained it does not need government bailouts - is up 14.75p to 541.75p.