We don't like Tiered interest rates

Lenders come up with eye-catching rates on personal loans. But take care with headline interest levels.

Some banks charge lower interest rates if you borrow more. Obviously, this could encourage you to borrow a greater sum. But sometimes, it can actually be cheaper to borrow more. It's all to do with where interest rate boundaries fall.

Nationwide, which does not penalise smaller borrowers, has worked out you could be a lot better off borrowing £5,000 from rival Lloyds TSB than asking for £4,700.

The bigger sum is charged at 8.9% so the total over four years is £6,163. But the smaller amount costs 14.9% giving a total £6,557. You get £300 less but pay £396 more - a total £696 loss.