Personal loan rates are still tumbling with many rates for borrowersat their lowest for two years or so.
Interest rates for borrowers looking for £7,500 or more have dropped steadily since the start
of the year – but now costs of borrowing smaller amounts are cheaper as well.
Leading the field is M&S Money with a headline rate of 6.9% for taking £7,500 or more. This is
the lowest personal unsecured loan rate for this amount of borrowing since June 2008.
Santander is also dropping its loan rates in line with Sainsbury’s 7.1% – down from level
pegging with Nationwide’s 7.2%
M&S Money and Santander are unlikely to lead the field for long as other lenders lower their
rates to beat or at least match the lowest costs.
But the costs of unsecured personal loans in smaller amounts is of interest to borrowers.
Loans at £3,000 and £5,000 now at lowest levels since 2009.
The average rate for borrowing £3,000 is 14.39% – the lowest average rate since November
2009, but way above the November 2007 rate of 10.6%.
The average rate for borrowing £5,000 is 10.02% – the lowest rate since June 2009, but again
above the November 2007 rate, which stood at 7.41%.
Credit card borrowers can also expect some new deals as lenders look to beef up their offers
to attract new customers.
Many held off changes until the new EC consumer credit directive rules started earlier this
month.
Nationwide and Barclaycard are juggling transfer rates in a bid to make card holders switch
providers, but both may face a rethink when MBNA, Virgin and American Express revamp
their balance transfer bargains early next month.
Barclaycard is currently offering 0% for 18 months on transfers – with M&S Money’s 0%
balance transfer deal lasting 15 months.
