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Consolidate with the cheapest loan rates EVER

Consolidate with the cheapest loan rates EVER

Category: Loans

Updated: 08/01/2016
First Published: 06/01/2016

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Whether you're looking to make that all-important purchase, want to give your home a makeover, or need to consolidate your debts after a festive season of over-indulgence, you're in luck – competition in the personal loans market is fierce and rates seem to be on a continuous downwards spiral, so much so that you can now benefit from the lowest personal loan rates ever!

Record-breaking rates

M&S Bank has just reduced the rate on personal loans of £7,500 to £15,000 by 0.2%, which means you can now secure a loan of this amount for just 3.3% APR! This is the lowest loan rate we've ever recorded, and follows the pattern of record-breaking rates that we've seen over the last year.

However, not only have individual providers been launching truly impressive deals, but average loan rates have been falling across the board in recent months, too. In fact, our own figures show that average rates for all loan amounts are now lower than they were at this point last year, and above the £5,000 level, all rates are at pre-financial crisis levels or lower.

Long-term benefit

These record-breaking rates could be a lifesaver for those who have a few too many credit cards to benefit from a 0% balance transfer deal, for example. Not only can a loan be far cheaper than a typical credit card, but it can give borrowers the chance to consolidate their debts and pay a single monthly amount, and once the term comes to an end, they'll have repaid the full balance and will be debt-free (provided they don't have any credit agreements 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 level of competition in the sector, now could be a great time to get in on the action, so why not start the process by comparing loan rates and see what's on offer?

Boost your chances of success

However, it's important to remember that, while the likes of M&S Bank's 3.3% APR deal sound hugely appealing, you may not be able to secure the headline rate. Providers are only obliged to give 51% of applicants their advertised rate, which means that nearly half will be left with a more expensive alternative – and it often comes down to your credit rating.

Those with the best credit score are more likely to be accepted for the headline deal, so it really could pay to get yours up to scratch. Read our tips on improving your credit score
and make sure to register with a credit check provider (such as Experian Credit Expert) to keep track of things.And, even if your score isn't quite good enough to achieve the best rates available, don't be disheartened: the sheer level of competition in the sector means that a personal loan could still be far cheaper than many other forms of borrowing, so make sure to compare the options and see if you could benefit from some record-breaking low-cost deals.

What next?

Compare loan rates

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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