The personal loans war in the UK shows no signs of abating this spring, with a leading loan provider once again slashing its loan rate. Fierce competition within the sector has resulted in Marks and Spencer Money reducing their personal loan rate to just 6.9 per cent for loans between £7,500 and £15,000.
This is the second reduction in as many months, with M&S already reducing their rates from 9.9 per cent in January. Moneywise reports that ‘this 3 per cent total reduction will save borrowers £591.48 on a five year loan of £7,500 or £854 on a £10,000 loan.’
Personal loan rates could drop even further
A leading consumer expert believes that it is only a matter of time before loan rates drop even further as the big lenders jostle for business. Michael Ossei from a leading comparison website says: “Consumers came out victorious earlier this year when Santander battled it out with Nationwide, when both suppliers dropped their rates to 7.2 per cent. However, Sainsbury’s entered the fray and took the lead with a market–lending rate of 7.1 per cent earlier this month. [This] could signal a new attack on rates, forcing them down even lower.”
Loan rates at their lowest level since 2009
Despite both Nationwide and Santander fractionally pushing up their rates (Nationwide’s loan rate has risen by 0.1 per cent to 7.2 per cent while Santander is currently charging 7.3 per cent), small personal loan lending rates are at their lowest level since 2009.
Moneywise reports that the average loan rate for a loan of £5,000 is now 10.02 per cent, the lowest it has been since June 2009.
Tim Moss, head of loans and debt at moneysupermarket.com says: “Having an open and competitive loans market is vitally important as it provides another option for consumers who may have been forced to look at other, more expensive borrowing when banks tightened up their lending criteria.”
