Interest rates

Interest rates are governed and controlled by the Bank of England and they try to meet the government’s inflation objectives to make sure that the economy is as stable as possible.

The Bank of England will usually try and decrease the interest rate when the economy is not spending enough to encourage people to spend. On the other hand, they could increase interest rates and make borrowing difficult and more expensive but in turn will help people that are willing to save their money.

Interest rates from provider to provider vary somewhat and usually depend on the type of loan which is applied for. For a secured loan, interest rates are usually considerable less than an unsecured loan and it is important that people understand the interest rate that has been negotiated. It is also vital that people know about their loans and how interest rate changes will take place over the duration of the loan agreement, if any as fixed rate loans will have a fixed rate of interest throughout the life of the loan.