Six lenders have cut the interest rates on their personal loans to attract new customers, in a sign that the loaning industry is finally relenting on handing out unsecured credit.
Santander currently offers the best product at 7.3%. The rate cuts have all been targeted at loans above £7,000, with reductions ranging from 0.1% to 2.4%
M&S Money and Sainsbury's Finance are also lowering their typical interest rates on loans for the New Year. But with Sainsbury’s the rates are only available to those with a Nectar card.
Andrew Hagger of Moneynet.co.uk says: 'It's welcome news for customers to see loan rates falling at long last and from some of the largest providers in the market. It's a shame that the rate cutting has, apart from Tesco and M&S Money, been targeted at existing customers only.
‘The other downside is that lower interest rates are not on offer for smaller borrowings, so for anyone looking to borrow a sum of say £2,000 to £3,000, the interest rate will be well into double figures and in some cases pushing 20% APR.'