Skip to main content
Apply Now

Have you planned for an interest rates rise? There is growing speculation that an interest rates rise will be on the cards after Mark Carney, the Bank of England governor, suggested that a rise in the Bank Rate was “drawing closer”.

The official Bank of England interest rate has been at a record low of 0.5% since 5th March 2009, and whilst the Bank of England has given no indication of exactly when a rates rise might come, the City is predicting spring 2016.

The last time interest rates rose was on 5th July 2007, and for a whole generation of borrowers the impact of an interest rates rise has yet to be experienced.

Even though the rates rise is initially predicted to be fairly modest, for many borrowers this will increase their monthly repayments, and for those already feeling the squeeze, it is especially important that plans are made now to prepare.

The obvious impact for many borrowers is on their mortgage repayments, and the focus of media attention tends to be on how much mortgage rates will change ahead of an interest rates rise, and what level of activity and trends are being seen in the mortgage market as borrowers look to re-mortgage and fix in to more favourable deals.

For borrowers with other forms of secured loans, unsecured personal loans and credit card repayments, an interest rate rise will have just as much, if not more, of an impact on the amount they repay each month. It is therefore also important that borrowers prepare for any changes well in advance to avoid any uncomfortable shocks.

Have You Planned for an Interest Rates Rise? | Debt Consolidation LoansPlanning for interest rates rise

As a starting point, borrowers should look at the terms of their repayment plans to see how it relates to interest rates. Fixed rate deals will be easier to plan for than variable rate deals, but it is important to look at the length of repayment deals to see when terms change. Now might be the right time to consider whether loans can be restructured to lock into more preferable fixed rate deals in the longer term that take any future fluctuations out of the equation.

For those with a number of different loan repayment plans, it could also be the right time to consider whether a debt consolidation package, fixing various repayments under one plan, would be suitable and achievable. This could potentially help with managing repayments over the longer term, and take out some of the fluctuations that would otherwise be difficult to plan for in the case of several successive rises in interest rates.

Whatever the circumstances of the borrower, the key thing is to make sure to plan in advance for the rise, whether that be simply to budget for the increase in repayments, or to undertake a detailed review of the current loan packages. Doing nothing is the only way that this long-speculated interest rate rise will come as a shock.

Debt Consolidation Loans are a UK based Debt Consolidation Loans Broker, We can help with any form of Debt Consolidation you may need.

Visitors also read:

Understanding What SIM Swap Fraud Is | Debt Consolidation LoansPersonal FinanceUnderstanding What SIM Swap Fraud Is
October 1, 2015

Understanding What SIM Swap Fraud Is

If your mobile phone suddenly stops working, notify your bank immediately as well as your service provider – you may have fallen victim to SIM swap fraud, which will quickly…
Can You Inherit Parents Debt? | Debt Consolidation LoansDebtCan You Inherit Parents Debt?
July 30, 2019

Can You Inherit Parents Debt?

Parents Debt A loss in the family is emotionally taxing for everybody, let alone with the impending financial hurdles that you will face, extortionate funeral costs, for example. The last…
Banking Revolution With Apps | Debt Consolidation LoansGuidesBanking Revolution With Apps
September 23, 2015

Banking Revolution With Apps

Banking revolution with Apps Imagine a bank which you can’t visit or speak to on the phone or access via your usual internet browser. Such is Atom - a new…
Citizens Advice Bureau Explained  | Debt Consolidation LoansGuidesCitizens Advice Bureau Explained 
December 10, 2019

Citizens Advice Bureau Explained 

Citizens Advice Bureau Citizens Advice Bureau - also known as the (CAB), is a UK-registered charity which provides UK residents free, impartial advice. This helps you understand exactly what your…
UK Debt Statistics Are You to be Affected | Debt Consolidation LoansDebtUK Debt Statistics Are You to be Affected
March 6, 2020

UK Debt Statistics Are You to be Affected

Are you affected according to the Office of National Statistics, UK residents are in £119 billion of household debt. This doesn't include mortgage debt but does include everything from credit…
debt consolidation loansPersonal FinanceNew Bad Technology – Voice Hacking
October 1, 2015

New Bad Technology – Voice Hacking

Be careful what you say and where you say it. That’s the message to be taken away from recent research into voice hacking by the University of Alabama at Birmingham…

Leave a Reply

1 + 1 =

Close Menu