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Featured - Account Types
What type of savings account do you need?Find out about the different types of savings accounts available to suit a variety of needs.
Savings
ISAs
Residential
Buy to let
Specialist mortgages
Featured - Debt and your credit score
How debt impacts your credit scoreA healthy credit score has its benefits, so make sure you manage your debt correctly.
Loans
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Life InsuranceFor peace of mind that your loved ones will be supported financially after you die, consider taking our life insurance. Find out more and compare policies.
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Health & travel
Featured - High interest current accounts
Find current accounts offering in-credit interest rates up to 5.00% AER.
Current accounts
Featured - Purchase Cards
Best purchase credit cardsExplore the best cards with a 0% introductory period.
Credit cards
Credit repair
Calculators & guides
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Business products
Business insurance
How much can I give as a cash gift?
How much can I give as a cash gift?Will your loved one's gift be tax affected?
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Consumers looking to take out a small loan to help them cope with unexpected financial costs during these uncertain times will find that average loan rates on modest sums have increased year-on-year.
Data in the latest Moneyfacts UK Credit Card Trends Treasury Report shows that the average loan rate on sums of £5,000 to be repaid over three years has risen by 0.3% year-on-year, from 6.8% in March 2019 to 7.1% in March 2020.
In addition to this, at a time when many consumers are worried about their finances, it could be better off for borrowers to hunt around and consider a less familiar name when choosing a loan, as the data from the report found that high street providers on average charge 1.1% more for a loan of £5,000. High street providers offering loans of £5,000 over three years charge an average of 7.8%, while other providers charge an average of 6.7% on the same sum and repayment term.
Unsecured personal loan market analysis
Average loan rates | March 2019 | December 2019 | March 2020 |
All lenders £5,000 over three years | 6.8% | 7.0% | 7.1% |
High street providers £5,000 over three years | 8.2% | 7.6% | 7.8% |
Other providers £5,000 over three years | 5.9% | 6.6% | 6.7% |
Source: Moneyfacts Treasury Reports
Commenting on the increase in unsecured personal loan rates, Eleanor Williams, finance expert at Moneyfactscompare.co.uk, said: “Considering the current economic conditions, it is important that prospective borrowers keep a close eye on the market, as unsecured personal loans are priced based on risk. As we saw during the financial crisis in 2008, loan rates can increase quickly when there is a spike in risk. These loans are not tied to someone’s home, like a mortgage would be, so lenders would have no security should a consumer default.
“It may take a few months for the market to adjust to any external influences, but consumers can still find competitive rates – although they are starting to rise. If borrowers are keen to apply, speed is crucial. As with any debt, it is vital that consumers ensure they are able to keep up with repayments regardless of any changes to circumstances.”
For those looking to borrow a sum of £5,000, a 0% purchase credit card could be a better option. For example, the longest interest-free period on a dual 0% purchase and transfer credit card is 27 months. Sainsbury’s Bank offers this interest-free period on its Dual Offer Credit Card Mastercard, which would mean borrowers would have to make an average monthly repayment of £186 over 27 months to repay the debt within the interest-free period. Alternatively, the cheapest £5,000 loan to be repaid over a period of 27 months comes from Tesco Bank. Its Telephone Personal Loan charges a rate of 3.4% APR, which would result in monthly repayments of £192.51.
While a credit card might be a cheaper option, borrowers should be aware that approval for a credit card is dependent on credit scores, so those with a low credit score might struggle to get the best interest-free deals. In addition to this, the rates advertised on loans are also dependent on credit scores, so again those with a low credit score might be offered a higher rate than that being promoted.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.
The Moneyfacts Pick of the Week showcases the best of the latest products or rate changes to hit the consumer finance market.
This week's selection includes an increased two-year fixed ISA from Aldermore, and a five-year fixed rate mortgage from first direct.
The number of loan and credit card providers dropped during the third quarter of 2024, while average interest rates increased. See what this could mean for you.
The number of loan and credit card providers dropped during the third quarter of 2024, while average interest rates increased.
Credit card interest rates continued to rise in 2024 while the number of interest-free deals stalled. Find out what this means for borrowers.
Credit card interest rates continued to rise in 2024 while the number of interest-free deals stalled.
The Moneyfacts Pick of the Week showcases the best of the latest products or rate changes to hit the consumer finance market.
This week's selection includes an increased two-year fixed ISA from Aldermore, and a five-year fixed rate mortgage from first direct.
The number of loan and credit card providers dropped during the third quarter of 2024, while average interest rates increased. See what this could mean for you.
The number of loan and credit card providers dropped during the third quarter of 2024, while average interest rates increased.
Credit card interest rates continued to rise in 2024 while the number of interest-free deals stalled. Find out what this means for borrowers.
Credit card interest rates continued to rise in 2024 while the number of interest-free deals stalled.
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Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.
Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.