Personal loan pricing is easing across the UK as banks and specialist lenders pass recent Bank of England Bank Rate cuts through to borrowers, and comparison sites report renewed demand for debt consolidation loans as a result. Weeks after the Financial Conduct Authority's Buy Now, Pay Later rules took effect, missed BNPL repayments are starting to reach credit reference files for the first time, giving lenders a fuller picture of borrowers' overall debt.
Representative APRs on unsecured personal loans in the £7,500 to £15,000 range have moved lower at several major lenders since the Bank of England's Monetary Policy Committee began cutting Bank Rate earlier in 2026, according to rate-tracking by comparison sites including MoneySuperMarket, Compare the Market and Uswitch. Falling funding costs typically reach personal loan pricing more slowly than mortgage rates, brokers say, because lenders reprice fixed-term unsecured lending in batches rather than continuously.
Consolidation enquiries climb alongside BNPL debt
StepChange and other debt advice charities have reported an uptick in enquiries about consolidation loans this summer, alongside continued questions about credit card minimum payments and Buy Now, Pay Later balances. Increasingly, some of that contact reflects borrowers who used instalment credit for everyday spending through 2025 and are now managing those repayments alongside existing card debt, the charities say.
Money and Pensions Service guidance notes that consolidation can lower monthly outgoings when it replaces several higher-rate balances with a single lower-rate loan, but only if the total cost of borrowing falls as a result rather than just the monthly instalment. Three checks come up repeatedly in that guidance before switching:
- the total amount repayable over the full term of the new loan, not only the monthly figure;
- whether existing balances carry early repayment charges that offset any saving;
- Buy Now, Pay Later and store credit agreements are not automatically folded in, so those repayments continue unless settled separately.
Affordability checks tighten as BNPL debt becomes visible
The FCA's most recent consumer credit data identified failed affordability checks as the leading reason personal loan applications are declined, ahead of missed payment history. Since BNPL agreements have started appearing in credit data following the rule change, brokers report that several mainstream lenders now factor existing instalment debt into affordability assessments even in cases where it does not yet show on a full credit file.
Guarantor loan providers, who typically serve applicants declined by mainstream lenders, say rejection rates have also moved as underwriting criteria adjust to the new reporting landscape. Separately, some lenders have begun asking applicants directly about outstanding BNPL commitments on loan application forms, ahead of those balances appearing consistently across all three credit reference agencies.
Comparison sites expect further movement in personal loan pricing if the Bank of England delivers additional Bank Rate cuts later in the year, though the pace will depend on lenders' own funding costs and risk appetite. Regardless of an applicant's existing credit history or reason for borrowing, the FCA requires an affordability assessment on every consolidation loan application.