A&L launches same-day access loan
Alliance and Leicester has launched a personal loan that allows customers to get their hands on the cash the same day they apply for the loan.
The loan, which has an APR of 6.9% over 60 months for amounts up to £15,000, is available for new and existing A&L customers through its branches.
Customers whose applications are accepted by 12.30pm on any working day will see the cleared funds deposited in their bank account before the day is out.
The bank, which is the first in the UK to offer same day fund release unsecured loans, anticipates the product will appeal to people who need to borrow money quickly – perhaps to pay off debt or finance a large purchase.
Although debt charities have been quick to criticise so-called 'easy credit' in the past, A&L says it remains a responsible lender and will assess each application carefully looking specifically at a borrower’s ability to repay the loan.
It also says it is up to customers to decide whether they should or shouldn’t borrow money for a purchase.
Richard Al-Dabbagh, personal loans manager at A&L, says: “The fact that the loan takes less time to be paid into your current account means that you can get it working for you even faster. And with one of the best rates available on the high street, our personal loans aim to meet the needs and budgets of virtually everyone.”
But a spokeswoman for debt charity the Consumer Credit Counselling Service, urges people to stop and think before taking out an unsecured loan. She says: “People should think carefully about whether they need to borrow the money and whether they are able to pay it back.”
The APR of 6.9% of A&L's loan means that it is more competitive than many store cards. Figures from Moneyfacts.co.uk shows the average store card APR is 27% when paid by direct debit with Dorothy Perkins’ coming in as most expensive at 29.9%.
Samantha Owens, a spokeswoman for Moneyfacts, says: "Store cards are undoubtedly some of the highest rates your will find. If you do find yourself with a debt hanging around your neck, then a personal loan may be a good solution.
“Rates can be much lower and the regular fixed repayments can work well for the less disciplined of us.”
Unsecured loans mean the loan is not secured on any asset you already own, such as a house, car or other assets and so is a riskier prospect for the lender. Therefore, they usually come with higher interest rates than their secured counterparts, are less flexible and levy high redemption penalties. Most “personal” loans are unsecured.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.