Interest rates on personal loans have been cut at Barclays by up to 0.6%, while its rivals are increasing rates following the global credit squeeze as a result of the problems in the US sub-prime mortgage market.

Barclays is offering a rate of 6.8% on the Barclayloan Plus product, which is aimed at existing customers and the bank is certain it can beat other deals in the market and attract new borrowers.

A spokesperson for Barclays Personal Loans said many lenders have been struggling to maintain their current loan rates and increases of 0.5% and more have been noted recently. The bank is so confident that it can beat competitor deals that if you take out a loan from Barclays and then find it cheaper elsewhere, they will pay the difference between the monthly repayments and then pay an additional £1 each month for any inconvenience.

UK Personal Loans Store, the internet comparison site, noted that 9 UK lenders have increased their rates for unsecured loans, some to the extent of 4%.

Source: http://www.financemarkets.co.uk/2007/10/15/personal-loans-rate-cut-at-barclays