Derbyshire BS launches cheapest personal loan in seven years

Competition in the personal loan market has intensified, with Derbyshire BS slashing its rates further to 5%, from 5.1%.

This makes it the cheapest provider on the market offering loans of between £7,500 and £15,000.

It’s also cut rates on loans up to £7,500 to 6.4%, from 7.2%, and those between £15,000 and £20,000 to 6.8%, from 7.3%.

But these deals are only around for seven days, as part of the building society's "loan sale" and expire at 11pm on 25th February.



Personal loan market

Derbyshire BS now offers the cheapest rate on loans between £7,500 and £15,000. It is narrowly followed by the Clydesdale and Yorkshire banks which both offer an interest rate of 5.1%.

This rate is the cheapest recorded in the past seven years, according to Moneyfacts.

Below I’ve listed the best rates for loans between £7,500 and £15,000.

Loan

Representative APR

Total cost of loan

Monthly repayments

Derbyshire BS Personal Loan

5%

£11,095.05

£184.92

Clydesdale Bank Online Personal Loan

5.1%

£11,318.40

£188.64

Yorkshire Bank Online Personal Loan

5.1%

£11,318.40

£188.64

Sainsbury’s Bank Standard Nectar Cardholder Loan

5.2%

£11,344.80

£189.08

Tesco Bank Personal Loan

5.2%

£11,344.80

£189.08



Rate increases

From today, AA loans have pushed up the rates for AA members to 5.7%, from 5.5%. It’s also increased rates on the loan open for everyone to 5.8%, from 5.6%, for loans of up to five years.

The Co-operative has made a similar change and from today new customers will have to pay 5.8%, instead of 5.6% on its five-year loan of £7,500 to £15,000.



Personal loan war

In the past few months providers have been fiercely competitive when it comes to interest rates.

Just two weeks ago Derbyshire BS cut its rate to 5.1%, matching similar loans from Clydesdale and Yorkshire banks.

Now Derbyshire has topped the tables again, but given how providers in this market have been acting, it’s likely another lender may cut its rates to keep up.

When getting a personal loan it’s important to remember that the headline rate isn’t applicable to everyone. Only those with a good, or in some cases excellent, credit history will be able to get the best rates.