Can Loans avoid the interest rate march?

With interest rates experiencing five step increases in the past 12 months and that additional jump to 6% possibly just around the corner, are loan borrowers suffering in the same way as mortgage payers?

Depending on the type of loan taken out, people with loan arrangements already in place may have interest charged either on an agreed fixed rate basis or a variable scheme. Many smaller, unsecured loans are taken out on fixed interest rate agreements and those borrowers will experience no impact as a result of recent changes.

However those with variable rate terms are likely to see changes in their monthly repayments, if they have not done so already. The good news for variable rate loans is that rates can reduce as well as increase and with industry watchers anticipating a peak in interest rates shortly, the worst may already be over. Those taking out new fixed rate loans at the moment are likely to get the poorest deal, as their rates could be fixed at what now seems to be a short-term high point.

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