Supermarket Lenders Recommended Over High Street Banks
The financial website lovemoney.com has published its latest guide to the most competitive unsecured personal loans.
The site said that personal loans are a good idea if extra cash is required for a major purchase or for the purposes of debt consolidation. This is the system whereby smaller debts are paid off and remaining debts are packaged up into a single, more manageable monthly repayment.
For most cases, an unsecured personal loan of between £7,500 and £15,000 was a useful sum. However, lovemoney.com warned that recent research had found that just 5 out of the 26 high street lenders were making personal loans available to new customers, compared to 23 out of 26 – or 88 per cent – last October.
The best interest rates on the market are with the Nationwide Existing Customer Personal Loan, with its basic interest rate of 7.7 per cent. As the name implies though, it is only available to current Nationwide customers.
This means that the options for anyone wishing to take out unsecured personal loans are more limited than they have been. For those with bad credit, the chances of getting the best rates are very low indeed.
Luckily, there are still two very competitive personal loans available to new customers, from Sainsbury’s Finance and the Alliance & Leicester. Both of these lenders offer a basic interest rate of 7.8 per cent and new customers are welcome to apply. A Nectar card is required for the Sainsbury’s loan, but this can be applied for at the same time as the loan itself and costs nothing.
Sainsbury’s supermarket arch-rival Tesco is also offering unsecured personal loans for new customers, with a good interest rate of 7.9 per cent. The next best option is the AA Personal Loan – available to new customers with an interest rate of 8.9 per cent.
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