moneysupermarket.com: positive moves in the loans market

Commenting on positive moves in the loans market, Tim Moss, head of loans at moneysupermarket.com, said: “With several loan rates on the rise, it’s positive to see providers such as Barclays and Co-op Bank bucking the trend.

“Your Personal Loan, the newly launched brand from Co-op Bank, now offers the nation's cheapest unsecured personal loan with a typical APR of 6.3 per cent. But despite Barclays “upping the ante” on its personal loans, on a typical loan of £10,000, there are still six providers with better rates, so it has some work to do live up to its own publicity.

"Barclays’ £50 incentive to swap your loan may be tempting for customers, but I'd advise caution before anybody takes the plunge. Existing loan customers should check the small print on their loan agreements to see what their early settlement penalty will be – it could well be more than the £50 offered by Barclays.

“On the other hand, Co-op’s market leading 6.3 per cent is an excellent rate, and even better is that it isn't rate-for-risk, meaning if you're accepted, the rate you applied for is the rate you will be offered. If there is one downside to this proposition, it’s that, although an unsecured loan, you do need to be a homeowner to apply.

“With the recent 'credit crunch' upon us, many lenders are pushing rates up so loans as reasonable as this won't be around for long."