Since the credit crunch hit the UK several years ago, the loans market across all sectors has been in a reasonable amount of turmoil, with changes in criteria and loan rates changing on an almost daily basis in some cases.

From small unsecured loans, all the way through to secured loans and larger home owner loan products, lenders have been constantly reviewing their lending criteria, initially to the point where many had almost withdrawn from the loans market altogether, back to the present, where lenders are now offering cheap loan deals to compete for a bigger share of the market.

The good news for borrowers is that the Bank of England base rate of interest for loans has remained at a historically low level of just 0.5 per cent for over three years now and loan rates, both in the secured loan and unsecured loan markets, have fallen significantly in recent months, as lenders slowly relax their criteria and gain more liquidity for lending.

However, on the down side, many banks and building societies are now increasing their standard variable rate on home owner loans, as well as increasing fees and charges on new loan products to record levels, which can seriously increase the overall cost of what initially appears to be a cheap loan deal.

Although home owner loan products seem to be getting more expensive at the moment, personal loans continue to get cheaper, particularly for larger loan sizes.

Rachel Springall of Moneyfacts said “Personal loans are becoming more affordable and this may be due to a set repayment scheme over a specific term, which is great news for consumers looking for a debt consolidation loan.”

“Credit cards continue to work on a minimum repayment system , so if customers are not careful the interest applied each month could mean that a debt would never get repaid.”