Difference between Bank of England interest rate, loan interest rates narrows

 

 

 

 

by Elaine Frei
May 17, 2007

A new study from moneysupermarket.com shows that loans such a debt consolidation loans and homeowner loans are cheaper than they have been in recent memory. The price comparison website has found that the difference between the Bank of England’s base interest rate and average interest rates for all kinds of loans has narrowed.

In March 2003, Bank of England interest rates were at 3.75 percent, moneysupermarket’s research shows, while the best loan deal available at the time charged 6.7 percent interest. Currently, the Bank’s interest rate stands at 5.5 percent, while the best loan deal the website could find sits at around 5.9 percent. Moneysupermarket’s head of loans pointed out that rates have been falling as the base rate has risen, sending lenders’ profit margins lower and setting up better deals for consumers.

This comes as good news to the many consumers who use such loans to manage their debt. According to money education charity Credit Action, six million people in the UK have taken a loan in order to consolidate their debt in the past three years.