Derbyshire BS cuts personal loan rate again!

ReenaSewraz
by Lovemoney Staff ReenaSewraz on 13 November 2012  |  Comments 2 comments

The rate war is heating up as Derbyshire drop its personal loan rate for the second time this month to just 5.4% - a new record low.

Derbyshire BS cuts personal loan rate again!

Derbyshire Building Society has cut the interest rate on its personal loans between £7,500 and £14,999 by 0.1% to 5.4%.

This drop is the latest development in the personal loan rate war that has been heating up this month.

M&S Bank kicked it all off by dropping its loan rate to 5.5% at the beginning of November. Derbyshire Building Society matched the cut just a day later, but the move wasn’t quick enough because at the same time Sainsbury’s undercut everyone to launch a rate of 5.4%.

However, Sainsbury’s lead was shaky as it only offered the cheapest ever rate of 5.4% on loans between £7,500 and £15,000 on a one-to three-year term.

Now Derbyshire has trumped its supermarket rival to  extend that rock bottom rate to terms of up to five years long.

Derbyshire vs Sainsbury’s

So on a loan of £7,500 taken out over three years you can take your pick from Derbyshire BS or Sainsbury’s Bank as both will offer a rate of 5.4%. Monthly repayments would be £225.69 at this market leading rate.

But if you were to need to spread the repayments out to five years Derbyshire is the cheapest place to go with a rate of 5.4% which will mean repayments of £142.47 a month. Sainsbury’s offering on these terms falls short with a rate of 5.5%, meaning monthly repayments would be slightly more at £142.80.

Borrowing £10,000 over five years

You can look at the whole market using our easy to use comparison tables, but below are the top five.

Loan

Representative APR

Total amount repayable

Monthly repayment

Derbyshire BS Personal Loan

5.4%

£11,397.60

£189.96

M&S Personal Loan

5.5%

£11,423.40

£190.39

Sainsbury’s Bank Standard Nectar Cardholder Loan

5.5%

£11,423.40

£190.39

Tesco Bank Personal Loan

5.7%

£11,476.20

£191.27

Clydesdale Bank Online Personal Loan

5.8%

£11,502.60

£191.71

With rates this low, there has never been a better time to take out a personal loan.

But remember these headline rates are just a typical APR and only has to be offered to 51% of successful applicants. So if your credit history isn’t squeaky clean you may end up being part of the 49% offered a higher rate.

More on loans:

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Amigo Loans and the dangers of being a guarantor

FridayFriday: the new 'ethical' payday loan company

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Comments (2)

  • JackJones
    Love rating 2
    JackJones said

    You guys obviously haven't been around for very long because back in 2006 Zopa had personal loans with rates well below 5.4%. This certainly isn't a "record low".

    Report on 14 November 2012  |  Love thisLove  0 loves
  • adrian406
    Love rating 0
    adrian406 said

    Don't believe it. This headline rate is so that they come top of the search results on comparison sites. Make an application (which can show on your credit report) and even as an existing customer with an impeccable credit rating the rate suddenly jumps up (in our case 5.7% to 7.9% with the Derbyshire). On calling them, they could offer no good reason for the hike, and tried to justify it by saying it's only a 'typical' rate and not guaranteed. Typical my backside!

    Report on 15 November 2012  |  Love thisLove  0 loves

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