Borrowers braced for higher loan repayments

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Loan rates have risen dramatically over the last month, as worried lenders hike rates amid turmoil in equity markets.

A study of the personal loans market conducted by uSwitch.com found that the last 28 days has seen eight lenders hike rates on their products.

These include mainstream lenders Lloyds TSB, Bradford & Bingley and Marks & Spencer which have all upped borrowing costs by one per cent.

Meanwhile, Black Horse has increased rates by nine per cent on loans of between £1,000 and £2,999 to bring the APR up to 36.9 per cent.

Louise Bond, personal finance manager at uSwitch.com, said: "As the news agenda overflows with the global financial meltdown, a plethora of loan rate increases have been implemented in the past four weeks."

The price comparison site''s research also discovered that lenders have withdrawn four loan products in the last month, bringing the total on offer to 52.

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