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Good news for borrowers, as loan rate falls to 4.6%


Sainsbury’s has cut the borrowing rate on personal loans of between £7,500 and £15,000 to 4.6%, beating both Marks and Spencer (4.7%) and Tesco (4.8%) to the market leading rate.

This news comes at a welcome time for borrowers, as rates on personal loans continue to fall despite the Government-led Funding for Lending scheme ending. The scheme was designed to provide cheap credit to banks in order to enable them to pass a low rate on to customers, but this will no longer be available on personal loans from this month.

Before the scheme was introduced in August 2012, the market leading rate for personal loans was over 7%, meaning rates have been significantly reduced throughout the term of the scheme.

However, with the scheme ending, there remains the question of whether rates will continue to fall or whether they might start to climb again.
Andrew Hagger of, said: “There’s no doubt there’s a bit of a war going on at the moment, but this may just be due to Jnauary being the time of year where more people tend to reorganise their finances and amalgamate borrowings.

“Rates may edge slightly lower in the next couple of weeks – perhaps the odd 0.1% here and there, but in the main I expect rates to remain pretty static during 2014”.

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