16:18 05 March 2013
From tomorrow (February 19), the Derbyshire Building Society is reducing the APR (annual percentage rate) on loans of between £7,500 and £15,000 to a leading 5% (representative) - an all-time market low.
You will be able to choose to repay the borrowing over terms of between one and five years, but the APR will remain fixed at 5% during the course of the loan, whatever timescale you choose.
However, you will need to act fast as this super-low rate is only available on the lender's shelves for seven days - the deal must end at 11pm on Monday, February 25.
The application process is straightforward and when you apply online, in most cases, you will receive an instant decision. There are also no hidden fees, so you won't be charged anything for setting up your loan.
Ever-improving loan rates
If you miss the week's window of opportunity, however, you still won't be doing too badly when it comes to this level of borrowing.
The Derbyshire usually charges an APR of 5.1% on loans of between £7,500 and £15,000, putting it joint top of the tables with Sainsbury's and Clydesdale banks.
However, to apply for the Sainsbury's loan you'll need to be a Nectar card holder and it can only be taken out over a maximum of three years.
What you need to know
Whether you apply for your loan within Derbyshire's seven-day sale or outside it, you'll need to be armed with a sturdy credit rating to be successful.
This is because the representative APR of 5% (or 5.1%) only needs to be offered to 51% of successful applicants. The actual rate you will be offered will depend on your credit score. So, if you are unsure of yours, it is well worth obtaining a copy of your report, which you can do on MoneySupermarket's credit reporting channel.
You may not have time to do this in the next seven days but, if you have any doubts about your score, it could stand you in good stead for the future.
Other requirements of Derbyshire's loan are that you must be aged at least 18, will be a UK resident for the full term of the loan and have a minimum income of £700 each month.
The cost difference
The Derbyshire loan goes that one stage further by shaving 0.1% off the cost of medium-sized borrowing. While this would only amount to an interest saving of around £24 on a £15,000 loan taken over three years, there's really no point in paying any more than you need to.
So, if you are looking for a cheap personal loan now and are sure you can afford the repayments, it will pay to get your skates on.
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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