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Lenders 'should pass on cut in rate to those taking our secured loans'

Banks need to pass on the cut in Libor rates to borrowers, including those taking out secured loans, Moneyfacts has claimed.

Libor stands for the London Interbank Offered Rate and it is the rate of interest at which lenders borrow from each other.

Darren Cook from Moneyfacts said now this rate has dropped, banks should pass on these lower prices to people taking out a range of products, including secured loans.

There is still a risk to lenders because the country is going into a recession and people are likely to have less disposable income so they may still struggle to meet repayments, he added.

However he stated: "The cost of finance to the banks looks like it is becoming cheaper now.

"They need to pass that onto the consumer now, so the consumer gets the benefit."

On October 20th, the three month Libor rate was at 6.11635 per cent, compared to 6.16000 on the 17th.


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