Borrowing could get cheaper but less available

In the past two weeks, the department of trade and industry (the dti) has made two announcements that could see the cost of borrowing reduced.

It has adjusted the maximum interest rate that will be allowed on loans from May 2016 and has also released draft proposals that could see credit insurance costs slashed.

If you are a regular reader of City Press, you will know that we have argued that interest rates are actually a relatively low percentage of the cost of borrowing, with many other fees adding significantly to the total cost of credit – the worst offender being credit insurance, which can add up to 40% on to the cost of borrowing.