By Adam Uren
PUBLISHED: 10:13 EST, 17 July 2013 | UPDATED: 10:13 EST, 17 July 2013
Nationwide has shot to the top of the personal loan charts by offering 4.9 per cent interest on lending between £7,500 and £14,999 - but only to its current account customers.
The building society has joined Sainsbury's Bank in topping the table, but you need to be a FlexAccount, FlexDirect or FlexPlus current account holder to access the best deal.
Nationwide offers the loans for up to five years, whereas Sainsbury's only offers the 4.9 per cent rate for up to three years.
Chart toppers: Nationwide is offering loans with an interest rate of 4.9 per cent to some of its current account customers.
John Crossley, Nationwide's head of personal loans, said: 'The Nationwide personal loan is now the most competitive rate compared to other high street providers and is certainly one to consider - whether you are looking to consolidate your debt, finance a new car, or pay for home improvements.
'Even if you do not have a Nationwide current account, you can still take advantage of our very competitive rates.'
This 'competitive' rate is the 5.9 per cent APR it offers non-Nationwide customers.
But even those who have a current account are not guaranteed to get the 4.9 per cent rate, as EU rules means Nationwide only has to offer this rate to 51 per cent of successful applicants.
Those with the best credit records are the most likely to get the 4.9 per cent rate.
It is Nationwide's second product launch aimed at its existing customers in as many weeks, after it announced a new issue of its Loyalty Saver account offering a 1.7 per cent return on deposits.
With two lenders now offering loans at rates of under 5 per cent interest, it might not be long for others to follow suit and offer loans without the caveats that come with the Sainsbury's and Nationwide products.
Competition in the personal loan market has cooled in recent months after a frantic year which saw rates slashed as the Bank of England's Funding for Lending scheme gave lenders access to cheap cash.
Derbyshire Building Society, Tesco Bank and Clydesdale Bank are among those which have set new lows for mid-range personal loans during that time.
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