Since we last reviewed personal loan rates in February 2007 the Bank of England has raised interest rates 2 further times, increasing the base rate now to 5.75%. This of course has had a knock on effect to interest rates charged on personal loans and mortgages.

Many analysts are now seeing more confidence in the market and several fixed rate deals are introducing lower rates, which must be an indication that increasing rates are reaching a peak and a longer term view is for cheaper mortages than at present.

Review published 2nd September 2007.

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On a regular basis we review the current rates for Personal Loans being offered by banks and loan brokers in the UK. Many people just look at headline rates but this can be misleading - some organisation will reject or turn down up to 90% of applicants if the loan deal is particularly low and attractive and only suited to people with very clean credit histories.

The recent rises in the Bank of England's base rate of interest (5 times since August 2006) may have prompted multiple interest rate changes on loans, so now is an opportune time for a quick review.

The lowest rate we could find for a Personal Loan in February was 5.6% being offered by Moneyback Bank (part of Alliance and Leicester), whereas the majority of high street banks and building socieites are offering around 6.7% - 6.9% for personal loans above £5000. For smaller loans the rate goes up. For any less that £7000 Halifax wants to charge you a typical rate of 15.6% and that is not unusual. For smaller loans HSBC and NatWest don't show their rates on their websites. However, Natwest did contact me online while I was looking at their site (a bit cheeky), so I asked them what their typical rate was - surprise, surprise they wouldn't tell me!! For secured loans, Paragon will charge a typical rate of 6.7% for loans larger than £25,000 and FirstPlus will charge 7.9% for loans above £5000. Also the availability and offers may only apply if you are an existing customer. Payment holidays are only available from HSBC if you are an existing customer and secured loans are only available from Northern Rock if you already have a mortgage with them. Review published 22nd February 2007.

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