In a surprise move, Barclays has cut rates on several personal loan products.
In a surprise move, Barclays has cut personal loan rates on many of its products. This follows recent rate rises by other lenders.
Certain loans have experienced rate reductions of as much as 0.6 per cent; the Barclayloan Plus product, available to existing customers, has seen its rates fall from a typical 7.4 per cent APR to 6.8 per cent.
Barclays says that's it been able to advantage of its strong balance sheet, and finance loans from its `very strong deposit taking business.'
The bank has also sought to demonstrate its confidence in the competitiveness of its products. Investors have been assured that if they take out a Barclays loan and then find it cheaper elsewhere, the bank will pay the difference between the monthly repayments, plus an additional £1 per month.
The move comes after a month in which several lenders have raised the interest rates on their personal loans, in reaction to continuing uncertainty in the financial markets.
Moneyfacts.co.uk recently reported that nine lenders raised their interest rates last week alone, with some loans seeing substantial hikes. At Bradford & Bingley, interest on loans between £2,000 and £3,000 went up by four per cent, to 17.9 per cent.
Lisa Taylor, analyst at Moneyfacts.co.uk, explained that such rate rises "probably more closely reflect the current financial market", with the previous, very low rates being "unsustainable" for the banks.
It'll be interesting to see if any other high street banks follow Barclays and cut rates themselves.
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