loan news

Payday loans have recently come under fire for charging interest rates of more than 3000% but an investigation has revealed that unauthorised bank overdrafts carry even higher charges.

The UK’s part-nationalised banks can be more expensive than going to a payday loan company, who charge high interest rates for short-period loans.

Lloyds TSB, which received support from the government through the recession, would charge £216.32 interest on a customer’s current account if they were overdrawn by £150 for 10 days.

Thousands of families are facing crippling debt problems after taking out doorstep loans from loan sharks in order to pay for Christmas.

A new report revealed that around 100,000 of the UK’s poorest families have taken out loans with an average APR of 825% during "the worst Christmas in a generation" for borrowing from doorstep lenders.

So-called “logbook loans” which allow consumers to borrow money against the value of their car could be banned under new government proposals.

The loans, which allow the lender to repossess a borrower’s vehicle if they default on payments, have been branded “archaic” by the department for business innovation and skills (BIS) who is calling for them to be outlawed.

Banks and other lenders have been ordered by the Financial Services Authority (FSA) to compensate customers to whom they mis-sold Payment Protection Insurance (PPI).

In the first instance only lenders who were responsible for the 40 per cent of PPI policies that were sold to customers taking out unsecured loans. These firms were selling "single-premium" PPI policies.

The cost of personal loans has increased again, with lenders once again increasing interest rates on unsecured loans according to research by a financial price comparison site.

Moneysupermarket.com claimed that the cost of interest on a £10,000 loan has increased by an average of £322 after some lenders increased their typical APRs by up to 1.2% for new customers since the beginning of the month.