Unsecured Loans Cost More While Base Rate Drop To 2%

It has been reported that the Bank of England's Monetary Policy Committee (MPC) has slash the base rate by 2% today, taking it down to a 57-year low of 2%.

The slash was widely predicted and followed a 1.5% cut in November, since when ministers have upped their strain on mortgage lenders to pass on the full extent of rate reductions to homeowners.

Lloyds TSB and subsidiary Cheltenham & Gloucester have already pledged to pass on today's base rate cut in whole, to existing customers with variable and tracker rate loans.

Whereas other mortgage lenders may still be in view of their positions, it would appear that at least two providers of unsecured loans, which are commonly used to merge numerous debts, have pre-empted the MPC's decision by rising rates hours before the declaration was made.

According to MoneyExpert.com, Lombard Direct raised the rate on one of its most competitive loans from 7.8% to 8.3% and for an unsecured loan of £7,500, while AA Loans hiked one rate from 8.5% to 9.4%, for a similar sum.

According to the price comparison website's direction, Sean Gardner, the Government is failing to take note of the fact that the unsecured loan industry has continued to raise costs, in spite of the record slashes in the base rate.

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