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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 It is now over 6 months old so the content may be out of date.

Derin Clark

Derin Clark

Online Reporter
Published: 17/03/2021

Interest-free deals on credit cards have improved over the last three months, while personal loan rates remain competitively low, but consumers are urged to act quickly to secure the best deals as experts warn that they could be withdrawn at any moment.

Consumers looking to ease the financial pressure of borrowing money, either through using a 0% purchase credit card or by transferring credit card debt onto a 0% balance credit card, will be pleased to see that the interest-free deals on these cards have improved since December.

Indeed, figures to be published in the Moneyfacts UK Unsecured Lending Trends Treasury Report found that since December, the average number of interest-free days offered on 0% purchase credit cards has increased by six, up from 278 on the 1 December 2020 to 284 on the 1 March 2021. Meanwhile, the average interest-free term on a 0% balance transfer credit card has increased by 10 days, from 520 to 530 during the same period.

“Over the past quarter, there have been some notable improvements to low-fee balance transfer cards – good news for borrowers looking to save on the upfront cost of moving their debts,” revealed Rachel Springall, finance expert at “NatWest dropped the balance transfer fee on its 18-month introductory 0% balance transfer offer for existing members to 0% from 0.49%, Barclaycard dropped its balance transfer fee from 1.45% to 0.90% while also increasing the introductory 0% offer from 20 months to 21 months, MBNA extended its introductory 0% balance transfer offer from 24 to 25 months as well as reducing its balance transfer fee from 1.50% to 1.00% and Virgin Money increased the 0% introductory balance transfer offer from 20 months to 24 months.”

Visit our 0% balance credit cards and 0% purchase credit card charts for the best deals today.

Personal loan rates remain competitive

Borrowers looking for a personal loan will be pleased to see that rates have remained competitive since December and the average rate on loans of £5,000 over three years have fallen in the last three months.

Since December, the average personal loan APR on amounts of £5,000 to be repaid over three years has fallen by 0.2%, down from 7.2% on 1 December 2020 to 7.0% on 1 March 2021. Those looking to borrow a slightly higher amount of £7,500 to be repaid over five years will find that average rates have remained at 4.6%, albeit there as a slight increase to 4.7% on the 1 February 2021 before it fell once more. Meanwhile, borrowers looking for a higher loan amount of £10,000 to be repaid over five years will find that average rates have increased by 0.1% over the last three months, up from 4.5% on 1 December 2020 to 4.6% on 1 March 2021.

“Although interest rates have not dropped across all tiers in the past quarter, some lenders have made cuts on loan rates on a £5,000 loan over three years, including AA, JN Bank, M&S Bank, Post Office Money and Sainsbury’s Bank,” Springall added. “As is always the case, borrowers would be wise to review their credit report before they apply and be mindful that they may not get the rate advertised, as the representative APR is only given to at least 51% of successful applicants.”

Visit our personal loan chart for the best loan deals today.

Borrowers can check their credit score for free here.

Will credit card and personal loan rates rise in the coming months?

Although credit card deals and personal loan rates have remained competitive over the last few months, finance experts warn that there is the possibility that the best credit card deals could be withdrawn from the market at any time. As well as this, depending on how the economy recovers from the ongoing pandemic, lenders may become more cautious, which could see personal loan rates rise. As Springall explained: “The months ahead are unknown, and lenders could review their attitude to risk when it comes to unsecured lending due to the prevalent impact of the Coronavirus pandemic, so borrowers may not see lucrative offers last too long. Persistent debts are still a concern and if consumers can do so, paying off their debts as well as building a safety net savings fund is a wise decision. Those struggling would do well to seek advice from a debt advice charity and speak to their lender as soon as they feel unable to keep on top of their repayments.”


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. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

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