The Moneyback Bank unsecured loan Typical APR has risen today by 0.4% to 7.6% and the cost of borrowing less than £5000 from the same lender has shot up by 1.9% to 10.8%.

Also affected by LIBOR, the unsecured loan market has seen gradual rate rises over recent months but has failed to attract as much publicity as the mortgage market.

The rises have not been quite as sharp as in the troubled mortgage market having only increased by an average of approximately 1% whereas mortgages have seen rises of over 2% in many cases and analysts are predicting worse to come before things get better.

With the majority of mortgage offers now over 6% borrowers may think twice about a further advance in the current climate in favour of a loan they could consolidate at a later date when mortgage rates eventually come down.

Mortgage rates are expected to settle and start to decrease back to ‘normal’ levels over the next two years.