Low interest loans

whyte12

Can any one explain why when the BoE bank rate is so low that personal loans are being offered at such high interest rates by the banks. Will loans ever get near the BoE rate?

_Andy_

Banks don't borrow money at that rate.
Additionally sales of PPI are now not so rife so there is far less profit to be made.

Credit-Crunched

_Andy_ wrote: »

Banks don't borrow money at that rate.
Additionally sales of PPI are now not so rife so there is far less profit to be made.

Due to the high volume of write off's banks are a bit more reluctant to lend now, also PPI was a huge profit driver, without that then rates will increase.

The ppi used to off set some of the overall costs allowing rates to remain low, now witout this i am afraid the days of cheap loans are up

BenL

The banks see most people as a high risk, people are being made redundant left right and centre and will be defaulting on payments.

They are pricing their loans according to this risk within the whole economy.

Who knows which compan will be next to weild the axe.