Unsecured Personal Loans borrowing money from your Bank: Tips on refinancing to save money in UK

Most people will go to their bank to get a loan. Nowadays, it's quick and easy. In fact, some banks will automatically pre-qualify you for some of their financial products or loans depending on how well you manage your bank account, and how much money goes in regularly.

For example, when you go to your bank to deposit a check or withdraw some money over the counter, the bank staff may ask you if you'd be interested in applying for a loan or, if you already have one, they may ask you if you'd like them to save you some money by reviewing your current loan deal and offering you a better rate.

One of my friends refinanced his loan deal three times this way and reduced his APR from 9.9% to just 6.7% APR. If you currently have a loan deal with your bank, it's worth contacting them and asking them if they can offer you a better deal. Most banks will agree to review your account for this purpose if you've had your loan for more than 6 months and you've been making your monthly payments regularly for each of those six months.

APR rates for personal loans are quite favourable. On 18 December 2006, I did a quick check on what banks were offering for unsecured personal loans. Here's what I found: (Please Note: Although the figures below were collected from bank websites on 18.12.2006, they are being used here for illustrative purposes only)

- Alliance & Leicester Loans - 5.9% APR Typical for unsecured personal loans between £7,500 and £20,000 and you have up to 5 years to repay the loans.

- Halifax Loans: 6.1% APR typical for unsecured personal loans (between) £7,000 & £25,000 over 2 - 7 years as the repayment period).

- Lloyds TSB: 6.4% Typical APR for loans for £7,500 - £25,000

- Barclayloan Plus: 6.9% Typical APR and you could borrow from borrow £7,500 - £25,000 over 2-5 years.

- HSBC Loans: rates from 7.6% Typical APR, between £7,000 and £25,000

- Natwest Loans: 6.9% APR typical

- TescoLoans: 6.9% APR typical, borrow between £3,000 and £25,000 with repayment holiday facility.

- Royal Bank of Scotland: Loans of 6.4% APR typical if you borrow £10000 or More.

(The figures quoted above are for illustrative purposes only)

These figures show that if you took out a loan in the 1990s or early 2000s when rates were in the region of 12.9% - 19% APR, you could save some money by refinancing to take advantage of these low rates. In most cases, you need to have a good credit history in order to be eligible. Personal loans are quick and easy to apply for. Many banks and supermarkets are pushing ads for loans heavily. For example, as you go through checkout at many of the major supermarkets like ASDA, TESCO or SAINSBURYS, you'll see lots of leaflets advertising loans. There are also lots of ads on TV and RADIO as well as the internet.

The quickest way is to call your bank, visit their internet site and apply online or just go to their branch if there's one near you. The disadvantage with going to the bank is the long wait - i.e. queues. But if you don't mind waiting, this could be the best option for you.

Remember to shop around. Your bank may not have the best rates. There are many lenders offering personal loans and you should look around a bit to see who could save you some money.

You can apply for a personal loan from brokers, post offices, high street banks, building societies, online banks, the major supermarkets and many other financial institutions. Just remember to shop around!

Article Title: Unsecured Personal Loans borrowing money from your Bank: Tips on refinancing to save money in UK

Disclaimer: All information at this site is provided for information purposes only. Do not base any finance related decisions on this information. This is not financial advice and should not be used as such.