Barclays has cut its interest rate on unsecured personal loans by up to 0.6 per cent when other lenders have moved in the opposite direction.

The bank is offering a rate of 6.8 per cent to existing customers and is confident it can better other deals in the market and attract new borrowers.

Gary Duggan, managing director for Barclays Personal Loans, said "If you take out a loan from Barclays and then find it cheaper elsewhere, we will pay the difference between the monthly repayments and then pay an additional £1 each month for your trouble."

Other lenders have raised rates after the global 'credit crunch' that followed problems in the US sub-prime mortgage market.

According to internet comparison site, UK Personal Loans Store, nine UK lenders have increased their rates for unsecured loans, some by as much as four per cent.

Source :- moneynews.co.uk