Whether you are looking to consolidate your debts after a little too much over spending after the festive season, or want to do some home improvements, now could be the best time ever to borrow money. Competition is the unsecured loans market is so fierce that rates are continuing to plummet and you can now benefit from the lowest rates ever!
M&S Bank has just reduced its current unsecured loan rate by 0.2% for loans between £7,500-£15,000, which means that the APR is now just 3.3%. This is the lowest loan rate deal on record, and follows a 2015 that saw rates continually fall. Indeed average rates for all loans are now lower than they were at the same time last year, with loans of £5,000 and upwards at pre-financial crisis levels or lower.
Such all-time low loan rates have benefits for others too, such as those that have too many credit cards to benefit from a 0% balance transfer incentive deals. A loan can work out far cheaper, and allows the borrower to consolidate all debts and pay one single monthly amount knowing that once that term comes to an end all debts will be paid. Providing of course, everything has been consolidated and there is no other debt elsewhere!
It won’t only be beneficial for consolidation, either, as a loan of this kind can prove to be an incredibly cost-effective form of borrowing for any reason necessary. Given the high level of competition in the sector, now could be a great time to get in on the action.
However, are you always guaranteed to get the best rate on offer? Obviously a 3.3% APR rate is massively appealing, but ultimately lenders are only required to give 51% of applicants their advertised ‘headline’ rate. Other applicants may not meet the very strict criteria for a headline rate, and so be offered an alternative rate, which is mainly dictated to by your credit score.
Those with the highest credit score are most likely to be accepted for the best rates, so it may be worth trying to monitor and improve yours. Registering with a credit reference agency such as Experian can help keep track of things. However don’t worry if your score is not at the level required for the headline rates. Competition is so fierce at the minute that an unsecured loan could still be far cheaper than other forms of borrowing, so make sure you compare all the deals to see if you could benefit from some record low rates.