This compares with an average rate of 7.34% in March last year. However, renewed competition among a number of providers has resulted in rates starting to drop back. The average APR has decreased by 0.2 percentage points over the past week to 8.68%.
Tim Moss, head of loans and debt at moneysupermarket.com said: "At long last competition seems to be returning to the loan market which is great news for consumers. A number of providers have reduced loan rates or launched new, cheaper products, in recent weeks – welcome relief to borrowers.
"Despite the Bank of England having slashed the base rate over the past six months, loan rates had continued to climb. Banks and building societies are more cautious about who they’ll lend to than in pre-credit crunch days, which has made it much harder for consumers to get loans.
"And the clampdown on the sale of payment protection insurance (PPI) has caused providers to hike up prices to recoup lost revenue. As a result it has become increasingly difficult to get a competitively priced loan. Let’s hope that the rate reductions we’ve seen recently are just the beginning and that we see more providers looking to attract new customers in the months ahead.
"Lenders will need to continue reducing rates if they want to draw customers back, particularly those who want to reconsolidate their debt. At the moment, with rates above 8%, consolidating is just too expensive."
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