Barclays cuts it loan rates

Major high street bank Barclays has announced that whilst its rivals are busy increasing interest rates on personal, unsecured loans as a result of the credit crunch that has hit the UK it is actually cutting the interest rates on its personal loans.

According to a recent report Barclays is cutting the interest rates on its personal loans by up to 0.6%. This means that existing customers can enjoy rates of 6.8% on the BarclayLoan Plus, and the bank is confident that it can also offer impressive deals to new customers as well.

A recent report indicated that many lenders in the UK had increased the interest rates on their unsecured personal loans, in some cases by up to 4%. This was the result of higher inter-bank lending charges and the credit crunch that was sparked in the sub-prime sector in the United States, and has resulted in turmoil in the UK's financial markets as well as financial markets on a global basis,

Barclays officials are trying to beat the competition whilst the going is good, so whilst other lenders continue to raise interest rates on their loans, Barclays hopes that its decision to cut rates will prove profitable in the long run. Officials state that if borrowers are able to find a cheaper loan the bank will pay the difference in repayments each month and an addition £1 per month for any inconvenience.

Around nine lenders are thought to have increased the interest rates charged on their personal loans recently, and this has taken the typical APR on a personal loan sky high with some lenders. Consumers are urged to continue shopping around to find the best deal on a personal loan, as there can be a significant difference in interest rates charges between lenders.

Tom Smith
17th October 2007

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