This review provides a brief synopsys of loans currently being provided by Building Societies in the UK. Although the number of Building Societies operating in the UK is reducing, this review of loans in that marketplace explains what they are offering and how this compares with the rest of the market

The ways loans are regulated in the UK depends on 2 main factors - whether the loan is secured against an asset owned by the customer - for example a property - and the size of the loan. It seems that building societies, which are used to getting their custom from their High Street branches or by contacting their existing customers, are more focused on unsecured loans. They compete on the high street with other societies and banks by quoting low headline rates of interest and because they focus on unsecured loans, this activity is less regulated than it otherwise would be for secured loans.

It's important to understand that when you see an advertisment for a loan that quotes a typical APR interest rate, that may not be the rate offered to you personally - it is just a guide. Many Building societies are using a loophole in the regulations to quote low typical APR rates and then qualifying in small print that these rates only apply to certain types of loan - for example loans above a particular size. Two examples from August 2006 are Nationwide advertising loans at 6.4% but only for £7500 and above - lower size loans could be as high as 14.4%, and Bradford and Bingley advertising loans at 6.7% for £5000 and above, but 13.9% for anything smaller

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