Review of the week: Nationwide Building Society Personal Loan

Personal loans are still a popular choice for those looking to consolidate debts or make an all important purchase.

Nationwide Building Society has recently dropped its personal loan rate from 7.9% to 7.6%. This drop in rate may be a sign of changing times in the loans market and we may see more providers follow suit. 

If you think that a personal loan is for you then read on to find out more about this market-leading deal.

What’s the deal?

Available for loans between £7,500 and £14,999, the rate of 7.6% is available for terms of one to five years. Loan repayments can be deferred for the first month, however, you will still accrue interest during that time.

Nationwide is one of the only loan providers to offer a personalised quote based on your individual circumstances that doesn’t affect your credit file. You will be given the rate available to you and only when you agree to this will a credit score be carried out. If you decide not to go ahead with the loan, you have the piece of mind that your credit history hasn’t been tarnished for you shopping around. 

It’s also worth noting that this is an unsecured loan so unlike some loans, it is not secured against your home.

Any catches?

This deal is only available to those with a Nationwide FlexAccount – the building society’s current account - meaning many potential applicants will fall at the first hurdle because they don't use this account. 

Some Nationwide customers may also be excluded from this deal as, not only do you have to hold a FlexAccount, you must have paid at least £750 or more per month into it for the last three months.

The annual percentage rate of 7.6% is a typical rate. This means it must be offered to at least 66% of successful applicants, but a third could be offered a higher rate - which could be as high as 19.9%.

Verdict

If you’re a FlexAccount customer looking to borrow between £7,500 and £14,999, this is a great deal.

Monthly payments on a £7,500 loan at 7.6% over five years would be £149.74. Compare this to the average loan rate of 10.91% and you would make a saving of £780 in interest on the same amount over the same term. Nationwide can easily ask for a quote as this will not affect their credit scores.

We are seeing an increasing number of providers restricting certain products to existing customers only. One of the main reasons for this is that, because they already have a relationship with you, they can see how you manage your finances. This helps when they’re assessing a loan or credit card application as they have a clearer picture of what level of risk they’d be taking in lending to you. 

If you aren’t a Nationwide customer, you obviously won’t qualify for this loan but there are some competitive alternatives. Alliance & Leicester is offering a loan rate of 7.8% and Sainsbury’s Finance has a rate of 7.9% which is available to anyone with a Nectar card.

To apply for the Nationwide loan click here. Alternatively you may want to apply for the A&L or Sainsbury’s loans if you don’t have a FlexAccount.

Top Tip

Regardless of whether or not you are an existing customer of the bank or building society you want to borrow from, the leading loan rates are only available to those with excellent credit scores.

Therefore, it’s worth getting in to the habit of regularly checking the information held about you on your credit file so you have a better idea as to which deals you’re likely to qualify for. After all, this is the information the lenders will look at when assessing any credit applications you make.

Use moneysupermarket.com’s new credit checking tool to compare the cost of accessing your credit file from the leading reference agencies.

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.

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