Clydesdale and Yorkshire Bank has launched a market-leading 5.1% personal loan on all borrowing between £7,500 and £15,000. Michael Ossei, personal finance expert at Uswitch.com**, says:** “This is further evidence of the hive of activity we are seeing in the personal loans market. At 5.1% APR, Clydesdale and Yorkshire Bank is leading the market and this is the lowest personal loan rate we have seen for over five years.
“But there is always a catch. While Clydesdale and Yorkshire Bank’s headline-grabbing rate is very attractive, the 5.1% deal is only available to those with an excellent credit history. Those not meeting the credit-scoring criteria may have to look elsewhere. With many consumers trying to tie down debts, banks have a responsibility to make sure they only lend to consumers who have the means to pay it back.
“This aside, it’s great to see competition in the loan market hotting up. These low rates could be a result of the Government’s funding for lending scheme which is estimated to provide £80 billion of funding for banks to lend on to market. Banks want to be seen to be doing their bit, but the onus remains on the consumer to take up these deals.
“While 5.1% is currently the best rate in the market, we will not be surprised to see rates below the 5% mark this Spring. Tesco Bank has been slowly and steadily reducing its loan rates over the last few months and this announcement may prompt them to slash rates further – and encourage other lenders to follow suit.”
“Consumers wanting to consolidate their finances over a long term period could consider taking advantage of a 0% balance transfer card with a nominal transfer fee, and waiting to see if personal loan rates come down further.”
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