Cheap Loans Availability On The Increase
The personal loan market in the UK is awash with a plethora of deals offering unsecured loans at very low rates. In fact, the market is so competitive that there are four times as many cheap loan deals available compared with 12 months ago.
However, the major banks appear to have so far resisted jumping on the bandwagon of cheap personal loans.
Currently there are 13 firms offering deals that allow consumers to take out unsecured personal loans with interest at less than six per cent. However, there aren’t any of the major high street banks among them, according to figures from online comparison service uSwitch.com.
Nick White, head of personal finance at uSwitch, said: “The personal loans market is at its most competitive for a long time as lenders continue to piggy-back one another to remain at, or reach, the top of the best-buy tables.
“ Northern Rock, AA, Cahoot and MoneyBack Bank in particular, have been some of the most consistent players in this competitive arena. Although a relatively new concept, Zopa, offers some of the lowest rates, hence why they’ve attracted more than 50,000 members since launch.
“ For anyone considering taking out a personal loan – to consolidate existing expensive debts, to buy a new car or finance a home improvement- now really is a good time to utilise such low rates of interest.”
Despite this area of the personal finance market being lucrative, the major high street lenders appear unwilling join in. It appears they are quite happy to not to be market leaders, in terms of interest rates, in this market.
At present HSBC, Natwest, Hbos, Barclays, Lloyds TSB and the Royal Bank of Scotland offer rates between 6.4% and 11.9%.
Ultimately, this means that taking out a unsecured personal loan from a high street bank could cost £1,000 more in interest payments than is necessary on a £8,000 four year loan.
For those considering taking out an unsecured personal loan, it would be wise to shop around and be aware of the best interest rates available in the market, in order for you to have an idea of what is a good deal. Also remember that it is highly unlikely that your own high street bank will be able to offer the best deal on a personal loan.