Banks enter rate war

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The UK is currently in the midst of a price war, with a number of personal loans providers fighting to offer borrowers the lowest interest rates.

While this means it’s a very busy time for financial journalists, it’s a great time for those seeking to borrow money without having to pay extortionate amounts of interest.

M&S Money

M&S Money was the first to drop its rate recently, decreasing the interest on its personal loans from 6.7% to 6.4% on 23 August.

This means that, if you borrow £7,500 and pay it off in three years, you will pay £228.90 per month and £8,240.40 in total.

‘We understand that the current economic climate is difficult for most families,’ said Colin Kersley, M&S Money’s Chief Executive.

‘We've therefore reduced our loan rate to ensure we're able to offer our customers the best rate possible on our personal loans,’ he added.

Nationwide

Next to action a decrease was Nationwide, which also reduced its rate from 6.7% to 6.4%.

This rate became available on 26 August on loans of between £7,500 and £14,999 to be paid off in one to five years.

Sainsbury’s Finance

Sainsbury’s Finance was the next to follow suit, reducing its interest rates on 30 August to 6.2% for loans paid off in one to three years and 6.3% for those repaid in four to five years.

If you took out a loan of £7,500 and paid it off over three years, you would pay £228.27 per month and £8,217.72 in total.

But, if you paid it off over four years, you would pay £176.57 per month and £8,475.36 in total.

These rates are only available to Nectar Card holders, but these reward cards are very easy to get hold of – just fill in a form in-store or online.

Alliance & Leicester

The most recent bank to decrease its rates was Alliance & Leicester, dropping from 6.6% to 6.4% on 2 September.

When taking out a loan, only take out the amount you actually need, don’t be tempted to borrow more as it will just leave you making repayments for an even longer time.

Before you commit to anything, be sure to read the fine print and look into a number of different loans from a variety of providers.

**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**

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