'Cap on personal loan interest rates needed'
19 February 2009 18:32:00
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| A cap on the interest rates charged by banks for personal loans is needed, says expert. |
David Thompson, MSP for the Scottish National Parliament (SNP), described HBOS and the new Lloyds Group's interest rate of 28% on high street loans as "outrageous".
He stated that the rate is nearly 15 times higher than the bank's lending rate and 30 times as high as the Bank of England's.
According to Mr Thompson, the UK should follow the practice of capping as undertaken by other countries within Europe.
He commented: "There is an easy way to stop these extortionate rates from high street banks, store and credit cards and lenders like the Provident. I want to see the UK government cap the rates banks and lenders are allowed to charge in interest."
"Once again consumers are being forced to pay for the failures of the banking system."
Figures from Moneyfacts reveal that the interest rate paid on a personal loan of £5,000 has risen from 8.6 to 12% during the past 18 months.
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