Personal Loans UK

CAR-CRAZY Britons, queueing up to get the first P-registration cars, should look for bargains in the personal loans showroom as well. But don't forget that unsecured personal loans can be used for that fantasy holiday, a trip to the ever-present High Street sales, a wedding or home improvements.

Despite rock bottom bank base rates of 5.75 per cent, shop around before you sign on the dotted line - it could halve the rate of interest you pay.

The AA has slashed its loan rates for existing customers by 2 pc to 14.7 pc for amounts over [pounds sterling]10,000 and is giving a special rate of 12.7 pc on that amount if the loan is to buy a car to be paid off in less than three years.

Marks & Spencer is offering a new personal loan facility that you can apply for before you need the money. M&S will give a chequebook with cheques made out to you. When you need the money pay one of the cheques into your account and interest charges kick in.

For loans between [pounds sterling]1,000 and the maximum [pounds sterling]3,000 APR is 13.9 pc, under [pounds sterling]1,000 it is 14.9 pc and there is no set up fee. Minimum repayment is [pounds sterling]5 or 3 pc of the loan a month made by direct debit.

The repayment period is typically between one and five years, although Beneficial Bank and Clydesdale Bank allow terms of up to ten years.

At the top of the rate range finance group HFC will wallop you with 29.2 pc APR if you borrow up to [pounds sterling]1,999 and even if you borrow their maximum of [pounds sterling]10,000 the rate is still 22.9 pc.

Midland Bank's unsecured personal loans start at 16.9 pc up to [pounds sterling]2,990 and fall to 12.9 pc if you borrow between [pounds sterling]10,000 and its maximum of [pounds sterling]15,000.

If you do take out an unsecured personal loan check if there is a penalty for paying it off early. Usually it is one or two months' interest payments.