Britain's high street banks are fighting a price war in the personal loans market in a
bid to attract customers as Britons struggle to pay off Christmas debts.
After Santander this week cut its loan rate to 7.3% , Nationwide hit back to offer 7.2%. Santander then matched Nationwide's deal for borrowers finding their loans through online comparison sites.
Rival lenders including Barclays, M&S Money and First Direct have all slashed their loan rates since the start of the year.
The battle for business in the loans market means the average rate charged for a £7,500 advance across the top 10 lenders has fallen to 7.83%, the lowest since November 2008, according to comparison site Moneysupermarket.com.
It said the most competitive deals are available on loans between £7,500 and £15,000, although the best rates are only available to customers with good credit histories.
Stefan Maryniak of comparison site uSwitch said: "It is no coincidence that this war on rates is happening just after Christmas when people are revising their finances and looking for some quick win loans. January is the month in which the banks fight it out to win new lending business so consumers should use it to their advantage by shopping around and, of course, only borrowing responsibly."
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