M&S is cutting its loan rate to help consumers, as car purchasing has seen a boom in recent months since the Government’s scrappage scheme came into force.

Customers applying for an M&S loan will find the rates cut from an average 9.9 per cent to 8.7 per cent APR, on personal loans of between £7,500 and £15,000.

The new loan rate is also available with the M&S Car Buying Plan, which allows borrowers to defer a fixed percentage of their loan; at the end of the loan term, they can either keep the car and continue making monthly payments until it is fully repaid, or keep the car and pay off the remainder of the loan with a lump sum, or, they can sell the car and use the money to pay off the remainder of the loan.

In the summer months during the run up to the new registration in September, M&S loans saw the volume and value of lending double, which M&S believes can be explained by the Government’s vehicle scrappage scheme, whereby car owners can trade in their old car for a £2,000 contribution towards a brand new one, providing their car is at least 10 years old.

The reduction in the M&S loan rate follows an announcement by the Government that it has extended the scheme with a further £100million, enough for a further 100,000 new cars and vans,  due to consumer demand.

Commenting on the new rates, Colin Kersley, chief executive of M&S Money, said: “It’s good to see that increased numbers of customers have been able to change to new, more environmentally friendly models.  With the new offer we hope that more will be able to upgrade their cars.  We’ve been providing personal loans for over 20 years, and it is our aim to remain competitive and innovative in the market”.

© Fair Investment Company Ltd