Money Insider: Finding the right personal loan could net a wheel deal when it comes to buying a new car

With the 59 new registered cars due out on 1 September, there will be a boom in demand for personal loans over the next few weeks, a fact that’s not gone unnoticed by some big-name lenders. That’s good news if you’re seeking some finance for your new wheels, as there are a couple of tempting offers that have appeared on the shelves this week.

Nationwide Building Society, for example, is offering the UK’s lowest personal-loan rate, of 7.7 per cent APR on loans between £5,000 and £14,999. Sadly, the offer is open only to Nationwide current-account customers, who must apply by 6 October to take advantage of the offer. If you qualify for the deal, a £10,000 loan over five years will set you back just £200.10 per month.

If you’re not a Nationwide customer, then it’s worth taking a look at Tesco Personal Finance at 7.9 per cent APR or YourPersonal Loan.co.uk at 8 per cent APR for the next best deals on a loan of this size.

Another new option is the Personal loan with cashback from M&S Money. The standard interest rate is 8.7 per cent APR on loans between £7,500 and £25,000, but if you apply by 7 September for a loan of £7,500 or more, and for a term of at least 36 months, you’ll receive 10 per cent of your interest back. This effectively reduces the interest to an equivalent rate of 7.9 per cent.

The potential downside of this offer is that to |benefit from the 10 per cent interest rebate, your loan must run its full term, so if you’re someone who refinances their borrowing when you change your car, it won’t be quite so appealing.

Savings

Most of the recent savings news has centred around fixed-rate savings bonds, but this week has seen the launch of a couple of interesting-looking accounts for those not looking to lock away a lump sum. The regular saver account launched by Norwich & Peterborough Building

Society fits the bill perfectly if you want to adopt the savings habit, whether it’s just to build up a balance that will lead to other savings options or to save up for something specific. The deal with the account is that you pay in between £1 and £250 every month for 12 months and you are rewarded with an interest rate fixed at a tasty 5 per cent for the first year.

There are a handful of other regular saver accounts around; however, unlike similar products with the same rate from Halifax and NatWest, this account does give you a measure of flexibility by allowing one penalty-free withdrawal during the year.

If it’s an instant-access savings account that you’re after, take a look at the Internet Saver account from Tesco, which pays 3 per cent gross from £1. While the rate is very competitive, you need to bear in mind that it includes a fixed bonus of 1.75 per cent, which only remains in place for 12 months.

There are other instant-access accounts worth checking out, such as the online saver from Alliance & Leicester, which pays 3.15 per cent on a minimum balance of £1,000, again with a bonus element in the first year. For a better rate still, there’s the Egg Internet Savings account at 3.25 per cent gross from £1, also including a fixed bonus (of 2 per cent) for the first 12 months.

So while these instant-access accounts are a great home for your emergency cash or rainy-day fund, you need to make a note to yourself to switch your money elsewhere once the year is up, otherwise your cash will end |up sitting in an account paying a dismal rate |of return.

It’s frustrating that you can’t find an easy-access savings account paying |a rate of 3 per cent or |more without having to put up with the limited bonuses and other associated unwelcome baggage. But, at the moment, you either play the banks at their own game and grab the best rate you can and then switch, or do nothing and risk getting a pittance on your savings: the choice is yours.

Andrew Hagger is a money analyst at Moneynet.co.uk

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