Competitive personal loans 'can still be found'

Despite surging increases in the cost of personal loans, those with a good credit score may still find they can access relatively competitive products.

Although interest rates on personal loans have risen significantly over the past three years, one writer says it is still possible to find a competitive deal.

Mark Adams of lovemoney.com points out that since the emergence of the financial crisis "the cost of borrowing has soared", with the typical rate attached to a £5,000 loan repayable over three years currently standing at a "massive" 12.4 per cent.

This is in comparison to the 5.8 per cent charged on best-buy loans at the start of 2007.

However, those who resolved to borrow may want to compare accounts to get a good deal, as Mr Adams states a number of providers are currently lending at a typical APR of 8.9 per cent for borrowers with a "solid credit rating".

Similar sentiments were echoed by Jane Baker - also of lovemoney.com - who claimed although rates have been rising consistently over the past couple of years "some competitive deals remain".

By Emma North