Bad credit financing becoming 'unaffordable'

Consumers wanting to borrow small amounts of money are struggling to find affordable loan credit and it is those seeking bad credit financing who are suffering most.

That is according to research from MoneyExpert, which has revealed that 60 per cent of searches in the last six months were for a loan for people with bad credit.

On average, the study found that the rates applied to loans of under £3,000 have increased in real terms by 1.4 per cent.

"The less well-off and those with poor credit records are being stung with higher charges for loans as banks and building societies cash in on rising interest rates," said Sean Gardner from the comparison site.

But he advised those hunting for a bad credit loan that "fortunately there are still some very good deals to be had so the trick is to keep abreast of market developments and shop around".

The report also revealed that more than 46 per cent of searches for loans of £3,000 or more were made by people seeking bad credit financing.

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