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Banks accused over 'rip-off' rates on small loans
Experts revealed that while interest rates were coming down for five-figure loans the banks were "extremely uncompetitive" on smaller amounts.
Customers wanting to borrow £3,000 from Halifax would end up paying back a total of £5020.80 over a five-year period given an annual percentage rate (APR )of 24.9 per cent. For the same amount, Barclays charge an APR of 19.9 per cent, NatWest 19.9 per cent, HSBC 18.9 per cent, Santander, 14.9 per cent, Tesco Bank 12.8 per cent and Sainsbury's 12.7 per cent. Halifax charges an APR of 7.4 per cent on a loan of £7,500 over five years, with Santander at 6.5 per cent and Barclays at 5.1 per cent Moneycomms said for smaller sums it would be cheaper for someone to use a peer to peer lender or an MBNA 'Rate for Life' credit card, which offers a 6.9 per cent rate as long as a customer meets a minimum monthly repayment schedule......Read more here
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