UK Banks to Reduce Interest Rates on Personal Loans this Season

It is appalling to notice that about half of the nation is indebted due to festive spending in U.K. The research findings of Sainsbury bank reveals that about 52 % of the people are planning to take loans between January and March to clear off their Christmas debts. January has been traditionally the month for clearing Christmas debts in U.K. This year is not an exception to that. More than half of the nation is looking to clear their debts by January end. To take full advantage of this situation, two banks namely, Sainsbury and HSBC have come up with cheaper personal loan options. Sainsbury and HSBC offer loans at 6.5 and 7.3 percents respectively. As an added benefit, HSBC also offer 25% interest refund during the repayment of the loan. This makes the personal loan cheaper by at least 10%.

Sainsbury also has a loan option that requires no repayment for first three months. It also has other loan options at competitive rates. According to Steve Baillie, loans manager, Sainsbury bank, "consolidating various debts into one personal loan is the cheapest option and it can save several pounds in interests and repayment". On the other hand, several critics hold the opinion that loans could take some years for repayment whereas credit card debts can be cleared within several months. So it doesn't make sense to take out a loan if the debt can be paid off in a relatively short span of time through a credit card. This can save several pounds being spent in interests as well. As the concluding note, it can be said that it is only the consumer who should take knowledgeable decision considering the pros and cons of various loan options.