Clydesdale and Yorkshire cut personal loan rates
Clydesdale Bank and Yorkshire Bank have become the latest lenders to chop their personal loan rates.
For unsecured online personal loans of between £5,000 and £7,499, and £15,001 to £25,000, rates are available from to 5.8% APR for new and existing customers.
The rate previously charged for loans between £5,000 and £7,499 was 6.4% APR, and for amounts between £15,001 and £25,000 it was 6.6% APR.
Loans for less than £15,000 can be repaid over a maximum of five years, while those above can run for seven years.
Andrew Pearce, retail director for Clydesdale and Yorkshire Banks, said: "We continue to drive down the costs of our loans, creating better value for customers across more levels of borrowing and all terms. Whether it is to make a purchase or to manage your finances more widely, personal loans offer some of the cheapest options available to consumers."
However, depending on the exact amount you want to borrow, the Clydesdale and Yorkshire rates vary in competitiveness.
For example, if you want to borrow between £6,999 and £7,499, you'd be better off with HSBC's personal loan, which has an APR of 4.8%. Over a five-year repayment term, you'd repay £141 a month and £8,450 in total, according to moneywise.co.uk.compare.
But borrow between £4,999 and £6,999 and you'd be much better off with the Clydesdale and Yorkshire loans at 5.8% because HSBC charges 6.1% APR.
This is why it often makes sense to tap in the exact amount you wish to borrow on a comparison website, rather than try to compare yourself, because providers operate different loan rate tiers.
Loan rate war
Since the onset of the New Year, somewhat of a personal loan rate war has erupted in the UK, with lenders falling over themselves to offer the cheapest rate to consumers who may have overspent over the Christmas period.
M&S Bank was one of the first to throw down the gauntlet to its high street banking rivals with the launch of its lowest-ever personal loan rate for those borrowing between £5,000 and £7,499 at 6.1% APR – so three percentage points higher than the Clydesdale and Yorkshire loans.
M&S's 6.7% APR on sums of between £15,001 and £25,000 is also a lowest-ever rate for the bank, but still comes in considerably higher than the Clydesdale and Yorkshire loans at 5.8% APR.
You can find all the the best personal loan rates at moneywise.co.uk/compare.
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%.