LAST CHANCE TO SECURE LEADING LOAN RATE
August 2008

“The leading loan rate in the country has been withdrawn from the market – but is still available exclusively through easMoney.com until the end of the month. With rates increasing this is your last chance to capture the market-leading deal…”

There’s been nothing but bad news for borrowers searching for a loan in recent weeks as a host of providers have hiked rates and even withdrawn products altogether as the cost of borrowing rises due to the credit crunch. So it’s a relief to be able to offer some good news at last – albeit this good news won’t last long.

First Plus, part of Barclays and the UK’s largest secured loan provider, announced at the beginning of July that it would pull out of the loans market with its initial withdrawal date being August 09. However, it has now extended its market-leading product offer until the end of the month.

The First Plus Exclusive, the leading secured loan in the country offering an annual percentage rate (APR) of 6.6%, will continue to be available only through easyMoney.com for this limited period. That means you can’t find the deal through the First Plus website, or through any other broker or aggregator – if you want this deal you must get it through easyMoney.com and you must act quickly.

Why the rush?

First Plus’s withdrawal from the market was indicative of the impact the credit crunch is having on lenders – and unsurprisingly, with the most competitive deal disappearing other lenders have moved quickly to increase their own rates.

During the month of July, 14 lenders increased rates with both the AA and Tesco Personal Finance choosing to increase their margins twice. Abbey increased some rates by as much as 5 percentage points; Intelligent Finance increased selected rates by 2 percentage points; while Lombard Direct and Direct Line both increased selected rates by 1.5 percentage points.

There have been other significant rate rises on selected loans from the likes of Alliance & Leicester (A&L), Halifax and the Bank of Scotland, Barclaycard, Barclays Bank, Lloyds TSB, Mint and Sainsbury’s Finance.

Low rates are disappearing quickly – so First Plus’s decision to extend its loan offer for a limited period offers a second chance to those who haven’t acted already. The margin between it and other leading loans has only grown wider in recent weeks with Magic Loans offering the next most competitive secured loan APR for consumers with a good credit score at 8.0% and Norton Finance offering an annual rate of 9.4% to those with fair credit scores. On a £10,000 loan taken out over 60 months the Norton Finance rate adds more £700 to the total charge for credit compared to the First Plus deal.

So should you grab this deal now?

Certainly if you’re in the market for a secured loan you shouldn’t waste time but do remember, while secured loans are a good option for those with large debts – particularly £25,000 or more for which unsecured loans are not available – the debt is secured against your property so your home could be at risk if you fall behind on your payments.

Also bear in mind that while the First Plus deal is the market-leader for consumers with good credit scores, it’s not available to those with poor credit scores – and having loan applications declined will have a negative impact on your credit rating. The table below outlines the leading deals for various credit ratings, but to find deals you’re likely to qualify for based on your circumstances use our Smart Search tool.

Secured loans – based on a loan of £10,000 over 60 months (without Payment protection insurance)