New record-low rates for borrowers to take advantage of from Clydesdale and Yorkshire Banks.
Clydesdale and Yorkshire Banks have reduced rates on their medium-sized personal loans to just 4.4%.
The rate is a record low, though it’s only matches the existing market-leading deal. You can get the rate on loans of between £7,500 and £15,000 over terms of one to five years.
Let’s take a look at the rates you can currently enjoy on a £10,000 loan over a five-year term:
|
Loan |
Representative APR |
Monthly repayments |
Total amount repayable |
|
4.4% |
£185.78 |
£11,146.80 |
|
|
Yorkshire Bank Personal Loan |
4.4% |
£185.78 |
£11,146.80 |
|
4.4% |
£185.78 |
£11,146.80 |
|
|
4.5% |
£186.02 |
£11,161.20 |
|
|
4.5% |
£186.02 |
£11,161.20 |
|
|
4.5% |
£186.02 |
£11,161.20 |
|
|
4.5% |
£186.02 |
£11,161.20 |
|
|
4.6% |
£186.46 |
£11,187.60 |
|
|
AA Personal Loan |
4.6% |
£186.46 |
£11,187.60 |
So Clydesdale Bank, Yorkshire Bank and Zopa now all offer a rate of just 4.4%, the lowest on record for medium-sized loans.
Zopa is a peer-to-peer lender rather than a traditional bank, so it works a little differently. It cuts out the middle man – the bank – so investors lend directly to borrowers. The thinking is that investors get a better rate on their cash and borrowers enjoy more competitive rates on their loans. As the table above demonstrates, it’s clearly working.
[SPOTLIGHT]While Zopa is known for cherry picking only the best applicants, it does at least offer a ‘soft search’ quote. This means you know whether you’ll get accepted without any record of an application being left on your credit report.
Rates come tumbling down
As the table demonstrates, borrowers have plenty of options with relatively small differences in cost when it comes to personal loans at the moment. It’s even more incredible when you look back 12 months, when the top loans came with a rate of 5.1%.
On a £10,000 loan repaid over a five-year period, that would equate to a total repayment of £11,318.40, more than £150 more expensive than all of the loans above. It just shows how rates across the board have tumbled on personal loans. Last month, financial data provider Moneyfacts declared that the average interest rates on personal loans had fallen to their lowest levels since 2006.
Will I get the best rate?
A word of warning though. Even if your application is successful, you may not be offered one of the great rates detailed above. That’s because lenders are only obliged to offer the Representative APR to 51% of successful applicants.
To get an idea of how your credit score looks, you can get a free trial with CreditExpert thanks to lovemoney.com. And if your score needs improving, be sure to read How to repair your credit rating.