Notes on Personal Loan Rates Lecture

Overview of Personal Loans

• Personal loan rates are lowest for values between £7,500 to £15,000.
• Competitive personal loans can be a wise, cost-effective way to cover larger expenses (e.g., new car, home upgrades, vacations, weddings).
• Rates are indicative and depend on credit score and personal circumstances.

Key Lenders and Their Rates

1. M&S Bank

• Sample Annual Percentage Rate (APR): 2.8%
• Loan Terms: Up to 7 years.
• Special Notes:
  • Existing clients may receive better rates.
  • Overpayments are free; penalties apply for full early repayment.
  • No late/missed payment fees but credit score may be affected.

2. TSB Bank

• APR: 2.8% (flat rate).
• Loan Amounts: Up to £25,000.
• Special Notes:
  • Two one-month repayment holidays available every 12 months.
  • Overpayments allowed at no extra cost; fees for early repayment.
  • Funds available next day for existing account customers.

3. Santander

• APR: 2.8% for loans £7,500 to £15,000.
• Loan Terms: 12 months to 5 years.
• Special Notes:
  • No penalties for late payments, but credit score may be affected.
  • Overpayments are free; penalties for early full repayment.

4. Kahoot (Part of Santander)

• APR: 2.8% for loans £7,500 to £15,000.
• Loan Terms: 1 to 5 years.
• Special Notes:
  • Overpayments are free; fees for full early repayment.
  • No late payment penalties.

5. MBNA

• APR: 2.8% (best recognized for credit cards).
• Loan Terms: Up to 7 years (2.8% rate limited to 5 years).
• Special Notes:
  • Overpayments free; penalties for full early repayment.
  • Lloyd’s Bank is the sole provider of MBNA personal loans.

6. Tesco Bank

• APR: 2.8% for loans £7,500 to £25,000.
• Loan Terms: Up to 7 years (2.8% rate limited to 5 years).
• Special Notes:
  • Fees for early repayment; free overpayments.
  • Being a Tesco Clubcard holder may benefit the application.

7. Virgin Money

• APR: 2.9% for loans £7,500 to £15,000.
• Loan Terms: 1 to 5 years (up to 7 years if less than 50% is for existing loan repayment).
• Special Notes:
  • Penalties for early repayment; free overpayments.

8. Post Office

• APR: 3.1% for loans up to 7 years.
• Special Notes:
  • Fees for early repayment; free overpayments.

9. AA (Automobile Association)

• APR: As low as 3.2% for loans £7,500 to £15,000.
• Special Notes:
  • Lower rates for members (3.1%).
  • Fees for early repayment; late payment penalties around £12.

Conclusion

• Best rates for personal loans ranging from £7,500 to £15,000 start at 2.8%.
• Current rates are historically low, aided by competition among lenders.
• Important to remember that the actual rate offered may differ from the stated rates due to individual circumstances.

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