Lenders are continuing with an interest rate price war on unsecured loans, which means that rates have continued to plummet. However, unsecured loans can have hidden fees and charges so it is always advisable to do your research first. Here at www.unsecuredloansforyou.co.uk we have compiled the most competitive rates for you to help you decide on the amount you wish to borrow and for how long. It’s also worth bearing in mind that a ‘representative rate’ only relates to 51% of the successful applicants, meaning that as many as 49% of applicants, if accepted, will be offered a different, usually much higher rate. Unfortunately the only way to see which rate you will be offered is to apply.
Currently the cheapest loans for borrowing of £1,000-£1,999 is peer to peer lender Zopa at 7.7% representative APR, depending on amount and term, with Hitachi Finance offering a 12.3% rep APR.
Sainsbury’s are not too far behind at 12.4% rep APR for Nectar card holders, over 1-3year terms, with 12.5% rep APR for non-Nectar card holders. Nectar cards are free to subscribe to.
For loans of £2,000-£2,999 again peer to peer lender Zopa are best at present with a 6.9-7.9% representative APR, depending on amount and term. Hitachi is offering a 7.4% representative APR on a slightly higher borrowing amount of £2,500-£2,999, with a 12.3% representative APR for £2,000-£2,499. Thus it seems borrowing slightly more means that you are offered a better rate.
Again Zopa offer a very competitive rate for unsecured loans from £3,000-£4,999, with a representative APR of 4.6-6.9%, depending on amount and term. Both Sainsbury’s and Hitachi are offering deals of 7.4% representative APR, but you must be a nectar card holder, else the rate is 7.5%.
As borrowing increases, rates decrease and the lenders become more competitive. For loans between £5,000-£7,499 Zopa offer a representative APR of 4.3% for terms of 1-3 years, and 4.4% for a 4-5 year term. Hitachi also offer a 4.4% rate, as do Sainsbury’s for Nectar Card holders on a 1-3 year term only, with the rate rising to 4.5% for non-holders. Marks & Spencer and Cahoot also offer a 4.5% representative APR. So with such rate fluctuations does it make more sense to borrow more? For example if you borrow £4,999 at 7.4% over a five year term, the total repayable is £5,996 at a cost of £100 per month. However borrowing just £1 more, so £5,000 means that the rate offered decrease to 4.4%, and so the total payable becomes £5,580, with a monthly payment of £93. This equates to a massive £416 less.
Perhaps the most competitive sector however is for those borrowing amounts between £7,500-£14,999. Nectar card holders benefit from Sainsbury’s bank where representative rates are 3.5% on terms of 1-3 years, with this rising to 3.6% for those without a Nectar card. Cahoot and Marks & Spencer also offer rates of 3.6%, and Zopa offer 3.6% representative APR on terms of 1-3 years and 3.7% for 4-5 year terms. Tesco Bank also offer a 3.6% rate but only to Clubcard holders, else its 3.8% representative APR. The Yorkshire Bank/Clydesdale also offers a 3.8% rate.
For loans of £15,000-25,000 many often think about a re-mortgage. However this often means extending the term and total interest payable. First Direct offer a 3.6% representative APR for 1st Account holders. Cahoot also offer a 3.6% rate. Zopa offer 3.7% representative APR but only on unsecured loans of up to £20,000 and for terms of between 4-5 years. Clydesdale/Yorkshire offer a 4% representative APR. Sainsbury’s bank does offer unsecured loans up to a maximum of £35,000, but this is a huge financial commitment and needs careful consideration. The rates offered are 6.8% representative APR on terms of 1-3 years, else a 6.9% rate if available.