Recent reports have shown that the British spent 1.3 billion on unwanted Christmas presents during the festive season last year. That’s unwanted presents. It is difficult to imagine, then, just how much we Brits spent in total during the Christmas period of 2007. So with an unimaginably high amount spent over Christmas, and the tantalising deals offered in the following January Sales, there’s little wonder why one financial commentator referred to January 2008 as â€the season of debt consolidation’. This new nickname for the post-Christmas period where people are caught between great deals and amassing debts was used in a report following the trimming of personal loan rates during the month. The report showed that within the first two weeks of January, five personal loan providers had reduced their interest rates by as much as 3%. The report also added, with rather unconvincing optimism, that it might set the trend for the year to come. However, as the following three months have shown, this seasonal fluctuation in personal loan rates were rather short-lived bargains; an example of lenders and providers making the most of a limited profit window. Since January 2008, the rate trend has been steadily increasing with personal loans rising at an average rate of 1.7 per cent over the last year, meaning an average loan of 5,000 could cost you 386 more than the same loan twelve months earlier. It is not only the smaller loans that have been affected. Although less severe than rates on smaller borrowings interest rates on larger loans have also been increased, showing a tightening of lending by the providers †making sure that they amend their unwise lending of previous years. The fact remains, however, that unsecured personal loans, although more expensive now, are still a great way to finance your shiny new people-carrier, to pay for that dream break away from the concerns of the credit crunch, or to consolidate your existing debts on credit or store cards. And there are still some great deals out there to be had, too. What is important, however, if you’re considering this avenue of financial support is that you compare personal loans from different providers, and find the one that best suits your current financial situation so that you can maximise your savings. One of the best ways to do this is to use one of the many online price comparison sites - some of which also provide facilities for checking your credit report online, thus allowing you to see how you appear to lenders.
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