New figures have revealed that personal loan rates for larger amounts are at their cheapest for four years. They peaked back in 2010 and have been dropping dramatically ever since. Meanwhile, however, the rates on smaller loans are starting to creep back up. The difference in the rates available for these different amounts is staggering.
So what are the five secrets to getting a cheap loan?
1. Consider the total cost of your borrowingThe figures, from Moneysupermarket found that the average rate for a loan between £7,500 and £15,000 is 6.79%, the lowest since the credit crunch first hit. That's a 1.48% drop since the same time last year.
Meanwhile, however, the cost of borrowing £3,000 is up to its highest in six months and would currently set you back an average of 15.15%.
It is worth thinking very carefully, therefore about how much you want to borrow, and the monthly repayments. If you increased your borrowing by just £100 it could have a massive effect on the rate you are offered, so it's worth investigating whether being cunning in the levels of borrowing could save you money overall.
2. Consider the timing of your borrowing.Tim Moss, head of loans and debt at MoneySupermarket.com, says: "As we move into the Christmas period, it is likely that we will see rates rise as lenders tighten their books." Lenders don't like desperate end-of-year borrowers who run out of cash because of a failure to plan ahead, so they will be very cautious about lending and rates will rise accordingly.
In the New Year, however, the rates will drop again. Moss adds: "We can expect to see some more inventive propositions entering the marketplace for 2012 as competition increases."