Hitachi Personal Finance is the latest lender to reduce its loan rates as experts predict interest rates may rise in response to rising inflation.
The lender has cut its headline APR to 3.8% from 4.7% on loans from £10,001 to £15,000, and to 3.8% for loans between £7,500 and £10,000 over two to five years.
The move, from August 24 guarantees customers no set up fees or hidden extras, and no charges if they make overpayments or settle their loan early.
Hitachi Personal Finance recently announced it had applied industry leading levels of flexibility across its range of loans. Once accepted, borrowers can alter the length of their loan, to make the monthly payments more affordable.
If borrowers take a loan over the maximum term available (usually 60 months) they would be able to reduce their payments by almost £500 a year on a loan of £2,500, and £1,800 a year on a £25,000 loan by flexing their term.
The UK inflation rate (CPI) rose to 0.1% in July, heating up the debate over when the Bank of England will start raising interest rates which have been at 0.5% since March 2009.
Experts are saying it is now a case of when interest rates will rise, rather than if, meaning the cost of borrowing will inevitably rise.
Gerald Grimes, managing director of Hitachi Personal Finance, said that the latest rate cut comes at the right time for borrowers.
“Customers can get their spending plans in place now before the predicted rise in interest rates happen,” he said.
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