M&S Money has announced it is reducing the rate on its personal loans from 9.9 per cent to 8.7 per cent APR.

The reduction is also available on the M&S Car Buying Plan, which gives new car buyers the chance to defer a fixed part of their loan.

Under the car buying plan, customers have the option at the end of the term to either keep the car and keep up monthly payments until the loan is repaid; keep the car and pay off the remainder with a lump sum; or sell the car and use the money to pay off the loan.

This new initiative follows on from the ten per cent cashback rewards that were offered in the summer on loans for new registration cars.

Once customers had repaid their debt, they received their payment based on the amount of interest they had accrued during the life of their loan.

Colin Kersley, chief executive of M&S Money, said the company aimed to continue its 20 years history of providing competitive and innovative loans to customers, "with the new offer we hope that more will be able to upgrade their cars".