The personal loan market is hotting up as rates fall and consumers are offered cash incentives to switch their personal loan provider.
Nationwide is offering personal loan borrowers £50 if they switch their personal loan from their chief competitors such as Barclays, Lloyds TSB and the HSBC before the end of September.
Nationwide claims that consumers are wasting up to £500 million annually on excessive personal loan charges. Adding to the fierce fight for a decreasing number of customers, the recent rate cut has also intensified competition.
Last week Abbey cut the typical rate on its loans to 5.7 per cent, while Northern Rock is offering a market leading 5.6 per cent. Ten lenders now offer personal loan deals at below six per cent APR.
"These rate cuts firmly indicate a renaissance in the personal loans market, with renewed competition stirring it back to life," loan analyst Stuart Glendinning told This is Money.
"If consumers are looking to borrow, apply for a personal; loan, or consolidate debts, now is the time to do it cheaply."
He warned that only those with excellent credit ratings are likely to benefit, as many lenders are tighten their credit and personal loan lending rules in the face of increased bad debt.
Battle for personal loan market heats up
Battle for personal loan market heats up
Thu, 18 Aug 2005
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