Sainsbury’s Bank has launched a new personal loan rate of 5.9 per cent for loans of between £7,500 and £15,000 taken over 1-3 years.
The best buy loan rate is available to all Nectar cardholders who have excellent credit histories and are looking to borrow for between one and three years.
The new rate marks the first time interest rates have fallen below 6.0 per cent since the start of the global financial crisis in September 2007.
Average interest rates for the top ten unsecured personal loans have dropped to 6.27 per cent, the lowest rate since May 2007 when the average was 6.28 per cent, according to figures from MoneySupermarket.com.
Tim Moss, head of loans and debt at the price comparison site said: “There is no doubt the credit crunch has had a significant impact on the personal loans market.
“Although there has been healthy competition over the past two years, this rate reduction by Sainsburys Bank is a real landmark – there hasn’t been a rate below 6.0 per cent since the financial crisis began.
“Although it is unclear at this stage how other providers will react, it is good to see rates coming down despite the country falling back into recession.”
He added that demand for personal loans has remained high this year as consumers seek to “consolidate debts from other forms of borrowing “.
