Barclays and Co-op are leading the way for good value lending according to Tim Moss, head of loans at moneysupermarket. He commented that with so many loan providers upping their rates in response to the current financial climate, it is “positive to see” big name providers “bucking the trend”.

Tim Moss advised that the Co-op currently offer the best rate in the UK unsecured loans market with an APR of 6.3 %. He added that “this excellent rate” is made even better because “it isn’t rate-for-risk, meaning if you’re accepted, the rate you applied for is the rate you will be offered”. The downside is that this loan is not accessible to all. Although the loan is unsecured, a borrower will need to be a homeowner to be accepted.

Another tempting option is the Barclays personal loan. The bank is offering a £50 incentive to customers who move their borrowing to them. The rate is competitive at 6.8 %, but Tim Moss advises borrowers to shop around, claiming that there are several other providers who offer better rates.

He warned all borrowers to check the small print when taking out a loan. For those customers who intend to move their loan, he advised they might find their current lender will charge them an early settlement fee, which may outweigh any gains from switching.

He continued to say that the trend for lenders to increase their rates is likely to continue as a result of the global credit crunch: Secured Loans as reasonable as this won’t be around for long.