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UK Personal Loan Rates Slashed Good News For 2012

by Jim ONeil on January 10, 2012

in personal loans

Personal loan rates in the UK are the most affordable in four years, according to Moneyfacts. During 2011, lenders including M&S Money, Sainsbury’s Finance, and Tesco Bank cut their rates.

The trend has not subsided, as seven lenders have already reduced their loans APR since January 1. UK residents are finally getting a break from increasing prices. They can now find more affordable financing to cover personal needs.

We are only one week into the new year but Barclays, Santander, AA, M&S Money, Smile, The Co-operative, and Tesco have already reduced the cost of their personal loans.

As one example, M&S Money reduced its rate for a five-year, £10,000 personal loan by 0.4 percent. The six percent rate currently offered is the lowest in the past four years, according to research.

Just one year ago, the lowest rate for this loan was 8.4 percent and even four years ago, the rate was 5.8 percent.

Moneyfacts spokesperson Rachel Springall reported that the current rates may not be the loans cheapest available this year. Rates are expected to continue their decline, benefitting financially strapped UK consumers.

Whether they want to consolidate debt or fund a major purchase, consumers will receive a low loans APR. Comparison-shopping is recommended based on the current level of competition within the market.

Despite this good news, loans bank offered are more difficult to qualify for because these institutions have tightened their approval criteria.

This may drive more consumers to online payday loans, which are easier and more convenient to obtain but carry a much higher rate of interest.

Though this financing is more expensive overall, consumers can also comparison shop for these to find the best deal. They should look for a reputable lender offering the lowest rate, no document faxing requirements, and instant approval.

Consumers can apply for these no credit check loans online and receive a decision almost instantly. The loan agreement is provided via email and once the applicant completes and returns it, the funds are deposited into the designated bank account.

Repayment is often made via debit card, making the process quick and easy. This type of loan is designed to be repaid by the next payday or shortly thereafter.

Therefore, consumers should not request a loan amount that is more than they can repay within that time.

Funds from payday loans may be used to pay for medical treatment, bills approaching their due date, education-related fees, and for many other purposes.

However, experts advise against using the money to make impulse purchases for unnecessary items. This type of shopping lands many people in debt, all for products that are not needed.

Consumers who qualify should apply for a low-interest personal loan from a bank before considering these no credit check loans.

If several banks reject the application, payday loans may be the best option for short-term borrowing.

No security is required and if the borrower repays the loan on time, interest charges will be much lower than if the loan is rolled to a new term.

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