MoneySuperMarket has compared the average and best buy rates on unsecured loans over the last year, and found that providers are offering some of their best ever deals.
It said that some of the lowest unsecured loan rates are currently available, as well as average rates across products dropping substantially recently.
HSBC is leading the charge after launching the lowest ever loan rate last week at 3.9% for loans between £7,000 and £15,000, although this is only available for existing customers. Tesco Bank also recently reduced its APR on loans of £7,500 to 4.1%.
In addition, average APRs on loans of both £7,500 and £5,000 have plummeted dramatically over the last year. Those looking to borrow £7,500 over five years were offered a rate of 10.16% APR in January this year – this has almost halved in just six months, with the average rate standing at 5.53 % at present – a difference in interest of £925 over the term of the deal.
Similarly, today’s average APR on loans of £5,000 over five years stands at 8.14% – this has fallen by 45% since January when the average was 14.86% – a difference of £909.
Kevin Mountford, head of banking at MoneySuperMarket, said: “It’s good news all round for many borrowers at the moment. Providers are vying to be top dog in the credit card and loan markets, meaning that deals are being extended and rates are being reduced in order to attract customers.
“However, with Bank of England Governor Mark Carney recently signalling that Base Rate will rise sooner rather than later, the era of cheap borrowing may be coming to an end, therefore consumers should act now to make the most of the current deals before they disappear.”
