Customers are being bombarded by banks with offers of personal loans larger than their annual salary.

Money Mail has discovered banks are marketing loans with sky-high interest rates, despite warnings that Britain’s household debt has reached record levels.

UK families are currently £25billion in the red — equivalent to almost a quarter of the NHS budget, according to the Office for National Statistics.

But, despite alarming echoes of the lead-up to the 2008 financial crisis, lenders are continuing to push more unsecured debt as we approach the Christmas period.

Reckless lending: Banks are marketing loans with sky-high interest rates, despite warnings that Britain’s household debt has reached record levels

Exclusive research for Money Mail reveals that half of Britons have been offered a personal loan by their bank in the past year, while a third have received an offer from a rival lender.

One in five say they are sent an email or letter about a loan at least every 12 weeks, according to the study of 1,267 people by researchers Consumer Intelligence.

Even more worrying is the size of the loans banks are offering. A quarter of borrowers say the loan was for more than £10,000, while a fifth say it was for more than their salary.

Even mortgage lenders typically only lend three to four times average salary, putting in perspective the huge sums banks are offering to pay for cars, renovations and everyday spending.

More than half of customers say that, had they accepted the loan offer, the repayments would have put them under financial pressure.

 Even mortgage lenders typically only lend three to four times average salary

Separate research also shows major High Street banks are offering poor value interest rates on these loans.

In some cases, the interest rate offered by their own bank costs customers up to £1,400 more a year than the cheapest deals available on the market.

The banks and building societies that admit marketing personal loans to customers include Barclays, John Lewis Finance, Santander and Nationwide.

Lenders insist they only send this type of correspondence to customers who have agreed to receive offers. But this may just mean at some point the customer ticked, or forgot to untick, a box.

Most claim to carry out a detailed assessment of customers’ financial history and their credit rating before making an offer.

In one example, Barclays sent a customer who had never expressed an interest in a personal loan an email once a month, offering ‘personalised’ deals. ‘We’ve got your personalised loan rate. 

Ready to go when you are,’ it reads. ‘If we approve your application, the money could be in your account in a few minutes.’

Addressing the customer by name, the email goes on to say: ‘There’s no hanging about with a Barclayloan personalised rate. 

It’s there, ready to help you get your plans moving, as soon as you decide you need it. With a single loan, you could spend less time on your finances, and more on the things you enjoy.’

In September, the City watchdog ordered banks to do more to help credit card customers in persistent debt

The email then breaks down the customer’s ‘personal example’ of what loans he can get and how much they will cost. The biggest is for £50,000 — £10,000 more than the customer’s salary. 

And, at 12.1 per cent, the supposedly personalised interest rate was far higher than if he had shopped around. It would net the bank £16,000 in interest over 60 months.

According to comparison site uSwitch, NatWest offered the same size loan at just 6.9 pc, with monthly payments of £983 — almost £118 a month cheaper than with Barclays.

James Daley, managing director of Fairer Finance, says: ‘It seems cavalier. If I was a Barclays shareholder, I’d be raising more than an eyebrow. 

‘For someone earning £40,000 to take out £50,000 of debt is potentially life-changing in terms of meeting the repayments. It seems irresponsible.’

In another example posted by a Barclays customer on Twitter, the bank offered her a £22,000 loan at a ‘personalised’ rate of 23.9 per cent.

By comparison, Sainsburys Bank offers a 2.9 per cent deal on a loan this size.

In John Lewis Finance’s emails, it offers ‘a loan you can live with’, for up to £25,000. It provides an example interest rate of 2.86 per cent over five years, for a £10,000 loan, with monthly payments of £290.14. 

Unlike Barclays, John Lewis’s rate is very competitive. But lenders are only obliged to offer 51 per cent of successful applicants the advertised rate — so borrowers could end up with a far worse deal.

Andrew Hagger, of financial advice service MoneyComms, says: ‘My concern is the banks are emailing you as if they are doing you a favour, so you might think they must be offering a good deal. 

That is not always the case.’

This year, Money Mail revealed how banks routinely hike customers’ credit card limits unprompted. In some cases, we found banks were tripling or even quadrupling people’s limits without them asking. 

Experts say banks are pushing personal loans after rules on issuing credit cards, mortgages and payday loans were tightened.

In September, the City watchdog ordered banks to do more to help credit card customers in persistent debt — someone who has in the past 18 months paid more in interest, fees and charges than they repaid of their borrowing.

It means that if customers are struggling, banks must offer them a reasonable way to repay their balance and waive fees.

The new rules followed a crackdown on payday lenders and hefty overdraft charges and an overhaul of the mortgage market in the wake of the credit crunch.

Yet the personal loan market has largely escaped scrutiny. Mr Daley adds: ‘The personal loan sector has been relatively unaffected, so providers are pushing them as hard as they can.’

Jane Clack, a money adviser at PayPlan, says: ‘Lenders need to take more responsibility to ensure that people are not falling into dangerous levels of debt.’

A Barclays spokesman said it only sends customers marketing about products if they’ve consented to receiving such messages.

A John Lewis Finance spokesman says: ‘We only send marketing emails to customers who have chosen to receive them. Customers can unsubscribe at any time.’

Don’t fall for their charm offensive 

Many banks offer cards with 0 per cent deals of up to 33 months

If you are buying something that costs less than £5,000, it may be cheaper to take out a credit card.

Many banks offer cards with 0 per cent deals of up to 33 months, which means you won’t have to pay any interest for nearly three years.

If you definitely need a loan, never accept your bank’s first offer. You will almost always get a far cheaper rate if you shop around.

However, remember that lenders are only required to offer their advertised rate to just 51 per cent of successful applicants. And many banks will only tell you the actual rate you’ll get after you’ve applied.

An eligibility calculator, such as the one on, will help you work out what interest rate you are likely to get.

It may work out cheaper to borrow slightly more than you had planned, as rates can be more expensive on the smaller loans.

But you should never borrow more than you can afford to repay.


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