Cheap personal loans multiply
There are four times as many cheap personal loan deals on the market now than 12 months ago - but this lowering of rates has not spread to the big banks.
While 13 companies are offering deals that let people take out cheap unsecured loans at less than six per cent, none of the major high street banks are among them, figures from online comparison service uSwitch.com reveal.
"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," said Nick White, head of personal finance at uSwitch.
"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."
But the largest high-street banks are not joining in.
Currently, HSBC, NatWest, HBoS, Barclays, Lloyds TSB, and the Royal Bank of Scotland are offering rates of between 6.4 per cent and 11.9 per cent.
This means that borrowing from a high-street bank could cost £1,000 more in interest payments than is needed on a £8,000, four-year loan.
"It still surprises me that the high-street banks retain such a large share of the market when they continue to offer some really uncompetitive deals," uSwitch's Mr White commented.
"In today's market, it makes far more sense for borrowers to check out what is available online before they head to the high-street for a low-rate loan."
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