It has been reported that finally the rates charged on personal loans rates may be starting to fall. For many this will have been a long time in coming, given that the base interest rate in the UK has been at an all time low of just 0.5 percent since last March.

The news is not all good, as rates on personal loans are still at five year highs. However, according to reports they have now fallen to their lowest level since the Bank of England cut the base rate to its current low in March of last year.

A number of lenders are said to have cut the rates on their personal loans recently, which will prove good news for anyone that is looking to borrow money. The loan rate cuts have been applied by both mainstream lenders and some other lenders such as supermarket finance sectors, and amongst the lenders that have reduced their personal loan rates so far are Nationwide, Halifax, Sainsbury’s, and Tesco.

Based on Moneysupermarket.com tables the average rate that is now charged on the top ten loan deals is now 8.35 percent on a loan of £7500. This is the second highest rate recorded since 2005, when the average rate was 6.3 percent, with the highest being seen at the start of last year when the average rate was 8.42 percent.

It has also been pointed out that in 2005 the base interest rate was far higher, and this meant that the profit margin for lenders was only slight coming in at around 1.55 percent.

These days, however, with the base rate being so low the profit margin for lenders has soared to around 7.85 percent. Many of these loans are also only made available to those that have the best credit ratings, and those that have blemished on their credit records can expect to pay a significantly higher rate or may find that they cannot quality for a loan at all.