Sainsbury’s Bank has cut its personal loan rate from 6.9 per cent APR to 6.5 per cent APR on loans of £7,000 to £25,000.
Research from MoneyExpert.com reveals that the average interest rate for personal loans has almost reached double figures in response to the global credit crunch situation. And, while some companies have increased loan rates, others have pulled out of the market entirely.
The new rate from Sainsbury's has topped the site's best-buy table, closely followed by Asda with its 6.9 per cent rate and Direct Line with 7.4 per cent. Furthermore, if customers take out the loan now, they can take a three-month repayment break, receive an instant decision and have the money within 24 hours.
Head of Loans at Sainsbury's, Steven Baillie, said: “We are delighted to be able to offer this market leading rate while other loan rates may be rising; at a time when our customers are getting ready for Christmas and planning for 2008."
Meanwhile, many high street banks are likely to sidestep a Banking Code rule which states that banks must write to customers if rates are moved by more than 0.25 percentage points compared with base rates.
If a further cut is introduced in January, as expected, banks will be able to move savings rates by as much as 0.5 per cent within a month. Those who have already introduced reductions include Barclays, Abbey, Natwest, Lloyds TSB, Halifax and RBS, with cuts at varying levels.
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