We say we would not do it again, but we always end up taking personal loans to buy that new toy, pay that bill, take out a mortgage on that house etc. Taking out a loan to handle your personal business is a great way to free up some extra money and if the interest rates are great, it really cannot be that bad. In the UK, there has not been a better time than now to apply for personal loans as the best loan rates have dropped from 7.5% to 3.3%.
Why did the interest rates drop?
The reason for the drop in the interest rates is simple: the number of banks and other loan facilities offering loans in the sector has pushed the asking rates down. This means that loan applicants have a larger collection of banks to approach for loans in this time. This article has a collection of some of the offers from some banks in the UK in no particular order. However, you should note that, the amounts posted on the loan advert may not be the same rate that will actually be offered to the applicant in the end. In fact, according to telegraph.co.uk, up to 90% of loan applicants are turned down simply because of their credit score. The lending banks are very likely to offer the loan applicant a higher rate than that advertised.
Some loan facilities in the UK and their rates:
Sainsbury’s Bank: This bank offers the lowest rates in the market, with only 3.3% charged on loans between £7500 and £15000. The loans are repayable over a period of 2-3 years.
M&S Bank: this bank also offers 3.3% for principals between £7500 and £15000. However, there are special benefits in place for long-term or existing M&S bank account holders. Repayment is between 1-7 years.
HSBC: this UK company offers 3.3% on loans between £7500 and £15000, repayable within 5 years.
First Direct: This bank offers 3.6% interest rates on loans between £7000 and £25000. Lower rates are available for individuals who own 1st Account current account. Repayment is possible between 1-7 years.
Tesco Bank: offers 3.6% on loans between £7500 and £15000, but only for Clubcard holders. Repayment is possible over 1-8 years.
Nationwide: offers 3.4% on personal loans between £7500 and £14,999. Payment period is 1-5 years. Negotiable lower rates are available to current account holders at Nationwide.
Clydesdale Bank: this bank offers 3.4% on loans between £7500 and £15000. While the payment period is usually between 1-7 years, some loan amount require only a 5 year limit.
It is worthy of note that at all the banks, favourable rates are negotiated. The rate advertised rarely ends up being the same amount offered to the applicant in the end, and bargaining skills and (more likely) an account at the bank can help to sway the table to a favourable corner. Well, what are you waiting for? Prepare your application and get that loan today.