HSBC loans are only available to the bank’s current account customers, though.
In order to qualify for the new rate of 6.4%, you must therefore be willing to switch your current account to the bank if you are not already a customer.
What’s the deal?
HSBC offers personal loans of anything from £1,000 to £25,000 over terms ranging from one to seven years.
It also offers flexible repayment terms under which borrowers can, for example, choose to make no payments in the first three months or pay nothing each January for the life of the loan.
However, the new representative APR of 6.4% only applies to between £7,000 and £15,000 and smaller loans are charged higher rates of interest.
According to the bank, someone borrowing £7,000 at this rate over a period of three years would make monthly repayments of £213.66, meaning that the full amount to be repaid would be £7,691.13.
Someone borrowing £15,000 over five years, meanwhile, would pay £291.55 a month, giving a repayment total of £17,493.23, while on the slightly smaller amount of £12,500, the monthly repayments would be £242.96.
The full amount repaid over five years on a loan of this amount would therefore be £14,577.69.
As mentioned before, HSBC personal loans are only available to the bank’s current account customers. If you do not already have a current account with HSBC, you will therefore have to open one to benefit from the new loan rate.
You do not have to borrow through HSBC to get your hands on a cheap personal loan, though. There are a number of other loan providers offering great rates at the moment.
Alliance & Leicester, for example, has a slightly lower representative APR of 6.3% on loans of between £7,500 and £14,950.
And its deal is available to both new and existing customers of the banks, making it an easier, and slightly cheaper option, for non-HSBC customers – unless you particularly want to borrow £7,000 rather than £7,500.
Other loans available at the same rate include Nationwide’s at 6.4% on amounts of between £7,500 and £14,999 and Marks and Spencer’s, which come with the same representative APR on anything from £7,500 to £15,000.
Nationwide FlexAccount customers can also pay an even lower representative APR of 6.3%.
HSBC has made its personal loans much more competitive by cutting the representative APR to 6.4%.
As the other market-leading deals are only available on £7,500 upwards, the change makes it the cheapest loan currently available on between £7,000 and £7,499.
However, the fact that the deal is limited to HSBC current account customers is likely to prove off-putting for anyone who is not an existing customer of the bank.
And this is particularly true when you can get cheaper rates on similar amounts through rivals such as Alliance & Leicester without switching your current account.
It is also worth pointing out that these low representative APRs will only be available to borrowers with excellent credit scores.
Those with less than perfect borrowing records will be offered higher rates, or rejected altogether.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.