New cheapest personal loan from Derbyshire BS

John Fitzsimons
by Lovemoney Staff John Fitzsimons on 30 January 2013  |  Comments 1 comment

Derbyshire BS has launched a personal loan with a rate of 5.1%. You won't find a cheaper loan on the market.

New cheapest personal loan from Derbyshire BS

Derbyshire Building Society has cut the interest rate on its personal loans of between £7,500 and £15,000 to 5.1%.

The move takes the loan to the top of the best buy tables, as the table below demonstrates on a sample loan of £10,000 over five years.

Loan

Representative APR

Total cost of loan

Monthly repayments

Derbyshire BS Personal Loan

5.1%

£11,318.40

£188.64

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

So while Derbyshire’s deal now sits proudly at the top of the tree, there’s very little in it between the top five personal loans available today. That’s fantastic news for borrowers, particularly when you consider that twelve months ago the cheapest deal was 6% from M&S Money.

As a result a £10,000 loan today is more than £200 cheaper than a year ago.

Are you representative?

Of course it’s worth bearing in mind that even if you are approved for a loan, you may not get the rate these lenders are advertising. These representative APRs only have to be offered to 51% of successful applicants, which means they only go to the borrowers with the best credit ratings.

If your record has the odd black spot on it you may be offered a higher rate.

You can check your credit record thanks to a free trial from Experian, through Lovemoney. And it’s also worth reading Ten simple steps to improve your credit record.

Making overpayments

It used to be the case with personal loans that paying off the loan early would cost you extra, in the form of early repayment penalties. So if your financial position improved and you were suddenly able to clear the loan in its entirety, you’d actually be penalised.

Thankfully, new rules have made it possible for us to make partial overpayments or even fully repay the loan without having to pay a penalty or admin fee.

The lenders themselves aren’t too keen on publicising this fact, but it’s an important thing to bear in mind. If you are ever able to pay a little extra towards your debt, make sure you do so, as you’ll be debt free much quicker as a result.

Read Overpay your loan without penalty for more.

More on borrowing:

The best 0% balance transfer credit cards

Ten simple steps to improve your credit record

Overpay your loan without penalty

Barclaycard launches the first 25-month 0% balance transfer card

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Comments (1)

  • babyhk
    Love rating 10
    babyhk said

    Is the Derbyshire loan just for locals as their current Regular Saver can only be opened in branch?

    Report on 30 January 2013  |  Love thisLove  0 loves

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