Best Loan Rates On Offer Thanks To Price War

A price war looks to be breaking out between UK lenders who are trying to reach their yearly targets for unsecured loans by offering some of the best loan rates seen for years to attract your custom.

HSBC, Tesco Bank, Nationwide and M&S Money have all jumped into the price war with some excellent offers available at the moment as long as you are looking for an unsecured loan of £7,000 or more.

First off the mark was Tesco Bank who cut interest rates from 7.4% APR to 6.7% for unsecured loans between £7,500 and £14,999 while today HSBC returned fire by cutting its own interest rates from 6.9% to 6.4% until November 13th for a loan between £7,000 and £15,000

HSBC are only offering the deal to HSBC current account holders or people willing to open a new current account with them but the deal does look exceptional value.

You can take the loan out for as little as 1 year or for as long as 7 years and you can opt to not have to start your repayments for 3 months OR our personal favourite – never having to make a repayment in the month of January for the life of the loan which is perfect for families recovering from the expense of Christmas.

The only word of caution is that anything less than a good credit rating and you probably won’t be offered this lower interest rate.

The building society Nationwide are offering 6.3% for unsecured loans between £7,000 and £15,000 which is currently the best loan rates available in the UK but as with HSBC, their cut price rates are only available to customers who have a current account with them. If you aren’t a user of the Nationwide current account – known as the FlexAccount – you can still get a very attractive APR of 6.4% which matches anything offered by the other banks and lenders.

Another one cutting interest rates is M&S Money who are also down to 6.4% APR as long as you are looking to borrow more than £7,000 and less than £15,000. As with the other lenders, loans for less come with a higher interest rate.

Andrew Haggar of MoneyNet thinks lenders are trying to stimulate the loans market by making them more attractive to households who are watching their budgets in the current economic climate.

Speaking to ‘This Is Money’ Mr. Haggar told them:

‘It could also be that the lenders are falling behind the targets they set themselves at the beginning of the year and are trimming rates to try to boost the take up.’

‘These rates are very competitive, but if you’re looking to borrow £15,000 to £25,000 for home improvements, you may be better considering a further advance on your mortgage where you could get a five-year fixed rate of between 3.5 per cent and 4 per cent in the current market.’ Read the full article here.

With some of the best loan rates we’ve seen for years it is clearly a good time to be in the market for an unsecured loan but don’t use low interest rates as a reason to borrow. An unsecured loan of £15,000 taken out over 5 years even at a great rate of 6.4% APR will cost you in the region of £2,500 so you need to factor that into the price of whatever you plan to purchase should you decide to take advantage of these loan rates.