Both are now offering a rate of 7.8% - the lowest rate on the market.
This week we are looking at the Alliance & Leicester personal loan.
What’s the deal?
The rate of 7.8% is available for loans between £7,500 and £14,950. And, unlike many of the other leading loan rates, you don’t need to be an existing A&L customer to qualify. However, you will need a good credit rating.
This rate is only available through a number of online sites of which moneysupermarket.com is one – if you go direct to A&L you will be charged a higher rate of 8.9%.
You can make your application online and you could have a decision within one hour. If your application is successful you will be sent an acceptance agreement. Once that is signed and returned to A&L, the funds will be transferred into your account. This will take 24 hours if you are existing A&L customer or up to four days if your account is with another bank.
If you are looking to take out a loan that you don’t need to start making payments on straight away then this product may not be the one for you as A&L doesn’t offer a deferred payment option, meaning that you will start to repay the loan from the first month.
For those that will be in a position to pay off the loan before its term has ended, you may be charged one month’s interest to cover the cost of setting up the loan - however this will depend on how far into the loan term you are.
If you are under the age of 21 you will not be able to apply for this loan, so younger borrowers who are looking to borrow for a major purchase, such as a car, can't take advantage.
This is one of the best buys for those looking to borrow over £7,500, and with many banks restricting lending to existing customers only, it’s great to see a product that is available to both new and existing customers.
The rate of 7.8% is only available if you apply through a price comparison site: if you choose to apply through A&L directly then you will be charged a higher interest rate of 8.9%.
If you are looking for a loan at the moment and think this is the product for you, it therefore pays to apply through moneysupermarket.com, rather than A&L because of the lower rate you’ll have access to. Over five years, you’ll save £220 in interest on a loan of £7,500.
Remember though, there is little point in applying for this deal unless you have an excellent credit rating.
Click here to apply for the A&L loan.
Top tip: Check your credit file
Whenever you apply for credit, the bank or building society will check your credit file when assessing your application. It’s therefore worth knowing what the lenders will be able to see – if any information on there is wrong you can have it corrected. Your credit score may affect the rate you receive from Alliance & Leicester; 66% of applicants must receive the typical rate, however, if you don’t quite match its criteria then you may be offered a higher rate or be declined 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.