Nationwide is increasing interest rates on its personal loans by 0.2 % for its existing customers.

To qualify as an existing customer, borrowers must have been with the building society for over three months, depositing £750 into their account each month.

Competitive rates are also available to other borrowers, though the building society does not advertise a typical rate, choosing instead to offer each applicant a personal interest rate depending on their credit record and risk profile.

Nationwide’s 7.7 % loans had topped the best buy tables for existing customers, though following the increase, Nationwide have been joined by ASDA in offering the cheapest personal loan, while ASDA’s product is not restricted to existing customers.

Sainsbury’s Finance are also offering a 7.9 % personal loan to Nectar card holders.

Tesco Bank, formerly known as Tesco Personal Finance, and personalloan.co.uk, are not far behind, offering personal loans at a rate of 8.0 %.

However, once you look beyond the 8.1 % loan offered by Halifax, interest rates rise rapidly, with Alliance and Leicester’s 8.7 % loan one of the best alternatives.