Current UK Loan Market

The loans market in the UK is really taking a battering at the moment. The banks are really struggling under the vice like grip of the credit crunch and this means that they are really reluctant to lend to each other - and to lend to us! This means that customers have rapidly seen loans getting far more expensive and also less available - and that's particularly the case with secured loans such as mortgages. Banks have been accused of lending loans irresponsibly to people who just can't afford to pay the money back - and also lending out more and more money to people already overburdened by debt. So we're paying the price now - the financial markets have seized up and the UK does appear to be heading into a recession. The government has responded by pledging to pump around £50 billion of taxpayers' money back into the system, to get things flowing again and encourage the banks to start lending, but it may mean that we as customers don't see the truly competitive Loans of old for a bit longer - and also find it more difficult to get accepted for credit.

However, don't fear as there still are some reasonably good loans offers available - and since the Bank of England has cut interest rates by 2% in recent months, loan charges may even come down more. It's worth rechecking the market regularly, perhaps by using a comparison site to work out which offer is the most suitable for you.

Some current competitive offers on the loans market to look at are as follows (based on a borrowing amount of £5000, over a period of five years):

Some online companies have got good offers - for example yourpersonaloans.co.uk is offering 7.9% on its loans, with a month's interest penalty for early redemption. Alliance and Leicester is offering loans at 8.8% APR to customers with good credit ratings. It also has the benefit of a quick and easy online application process and commits to making a very quick decision. There's no admin or acceptance charges or fees, and it's a fixed loan - which means that there'll be a fee if you pay it off early. Sainbury's Personal Bank is also offering personal loans at 9.8% - again for customers with good credit ratings and with early repayment fees if you want to foreclose any loans early.

Halifax and Bank of Scotland offer personal loans at 12.8% and they say that holding a bank account with Halifax may help to get loans accepted. They are also looking for customers with good credit ratings. The Bank of Scotland loan is not repaid for the first three months - a Payment holiday - but note that interest will still continue to be charged during this period, so you may choose to opt out of this!