Top Loans News

Derin Clark

Derin Clark

Online Reporter
Published: 05/02/2020

TSB has reduced the interest rate on its unsecured personal loan and is now offering borrowers 2.9% APR on loans between £7,500 to £25,000.

The high street bank previously charged 3.2% APR and its rate reduction sees it offering one of the most competitive rates in the personal loans chart. The new rate is available to both existing and new customers and can be applied for online, in branch or by phone. It includes a number of features such as payment flexibility and payment holidays. Borrowers looking for a loan between £20,001 and £25,000 over terms of 61 months to seven years should be aware that TSB charges a higher APR.

Commenting on the rate reduction, Graham Dodds, head of loans at TSB, said: "At this time of year, many people will be re-organising their finances, thinking of buying a new car, planning their summer holiday or simply consolidating their outstanding debts. Whatever the reason, the new TSB market-leading rate of 2.9% could be the perfect solution as it also allows customers the flexibility to make overpayments and the opportunity to take payment holidays should they need to do so.”

Second charge mortgage new business volumes increased during November 2019, data released by the Finance & Leasing Association (FLA) today reveals.

According to the data, there was a 14% year-on-year increase during November in the number of second charge mortgages, a total of 2,594 new agreements during the month. In addition to this, the average value of second charge mortgages also increased, by 3% year-on-year, during November. Commenting on the data, Fiona Hoyle, head of consumer and mortgage finance at the FLA, said: “The second charge mortgage market reported a fifteenth consecutive month of double-digit new business volumes growth in November. The average value of second charge mortgages in November grew by 3% compared with the same month in 2018 to £44,530.”

With many bank balances depleted and credit cards creaking after the festive period, some consumers may be considering how to get their finances back in shape for 2020. A new loan might be the answer to consolidating expensive existing debt or simply a way to fund their plans for 2020. We’ve looked at the sector and found the best deals currently out there for a range of loan types.

Christmas can be a financially stressful time of year, so consumers looking to consolidate their debts during the festive period or into the new year will be pleased that the average personal loan rate has fallen.

Research due to be published in the Moneyfacts UK Credit Card Trends Treasury Report reveals that the average rate in the £5,000 over three years tier has fallen by 0.2% since November to stand at 7.0% today, while the £10,000 over five years loan tier decreased by 0.2%, offering 4.5% today. As well as this, the average rate at the loan tier of £7,500 over five years has also fallen, albeit by a more modest 0.1% over the month to stand at 4.6% today. 

Commenting on the fall in loan rates, Rachel Springall, finance expert at Moneyfacts, said: “It’s encouraging to see that the unsecured personal loans market is still buoyant, with rates falling over the past quarter. This improvement to the loans market could be encouraging for borrowers considering consolidating their debts either now or in the new year.”

Unsecured personal loan market analysis 

Average loan rates (by tier) Dec 2017 Dec 2018 Nov 2019 Dec 2019
£5,000 over three years 7.2% 6.8% 7.2% 7.0%
£7,500 over five years 4.7% 4.8% 4.7% 4.6%
£10,000 over five years 4.6% 4.7% 4.7% 4.5%

Source: Moneyfacts Treasury Reports

With the average debt levels in the UK rising by 6% since 2016, many consumers are struggling to pay back money owed on credit cards and other debt. With only three months left until the end of 2019 and the current economic uncertainty looking to continue until the end of the year, borrowers with debts could look at getting a head start on organising their finances before 2020 by consolidating their debts now.

At the moment, personal loan rates have remained fairly stable, however, with the current economic climate personal loan rates could increase. We saw this happen in the credit card market where the average APR was at its highest level since Moneyfacts started keeping records 13 years ago. As such, consumers should consider acting sooner rather than later in case personal loan rates start to rise as well.

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TSB reduces the rate on its personal loan

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