Best personal loan rate drops to 4.6pc Industry executives have told the Telegraph that demand is fast rising for those looking to fund car purchase and home extensions, with the added demand increasing competition. Andrew Hagger of money advice website MoneyComms.co.uk, said: "There's no doubt there's a bit of a rate war going on at the moment, but this may just be due to January being the time of year where more people tend to reorganise their finances and amalgamate borrowings. Rates may edge slightly lower in the next couple of weeks - perhaps the odd 0.1pc here and there but in the main I expect rates to remain pretty static during 2014. In December, Tesco Bank reduced the interest charges on its personal loans between £7,500 and £15,000 to 4.8pc. Last week, Sainsbury's Bank undercut its rival by offering 4.6pc on its personal loans between £7,500 and £15,000, and yesterday M&S Bank responded by launching its new rates of 4.7pc for loans between £7,500 and £15,000, exclusively for existing M&S current account, credit card and loan customers. Clydesdale and Yorkshire became the latest banks to reduce their loan charges this week, offering a rate of 4.7pc on loans between £7,500 and £15,000. All five banks offer rates under 5pc. It is important to know that the advertised representative rate will not be offered to all applicants. Sainsbury's said its market-leading 4.6pc rate is offered to "at least 51pc of customers," which is an industry rule. The Office of Fair Trading currently polices the industry although this will pass to the Financial Conduct Authority in April. So, who offers the best deal? Below, we take a look at what each bank is offering. Sainsbury's Bank - cheapest The rate: Borrowing between £7,500 to £15,000 is charged at a rate of 4.6pc representative. This offer is for a limited time only - apply by January 31, 2014. The loan rate is available to Sainsbury's customers with a Nectar card (your Nectar card must have been swiped instore or used online in the last 6 months). Borrowing between £1,000 to £2,999 is charged at 18.6pc, loans from £3,000 to £4,499 are 12.6pc, loans from £5,000 to £7,499 are 6.9pc and loans from £15,001 to £25,000 are charged at 7.2pc. How long: The interest is fixed for the life of the loan, which can be from 12 months up to 36 months. How much: Borrowing £12,000 over three years will cost £357 a month. Over the entire life of the loan, it will cost £869 in interest. More details: Sainsbury's personal loans Tesco Bank The rate: Borrowing between £7,500 to £15,000 is charged at a rate of 4.8pc representative (this might not be offered to all applicants as rate depends on individual credit history). This offer is for a limited time only - apply by February 5, 2014. Borrowing between £3,000 to £4,999 is charged at 12.8pc, loans from £5,000 to £7,499 are 6.4pc and loans from £15,001 to £25,000 are charged at 6.8pc. How long: The interest is fixed for the life of the loan, which can be from 12 months up to 120 months. How much: Borrowing £12,000 over three years will cost £358 a month. Over the entire life of the loan, it will cost £908 in interest. More details: Tesco personal loans M&S Bank The rate: Borrowing between £7,500 to £15,000 is charged at a rate of 4.7pc representative. The loan rate is only available to existing M&S current account, credit card or loan customers. New customers can get rate of 4.8pc representative. Borrowing between £1,000 to £2,999 is charged at 18.5pc, loans from £3,000 to £4,499 are 12.5pc, loans from £5,000 to £7,499 are 6.1pc and loans from £15,001 to £25,000 are charged at 6.7pc. How long: The interest is fixed for the life of the loan, which can be from 12 months up to 60 months. Over the entire life of the loan, it will cost £889 in interest. New customers will have to pay back £358 a month or £908 in total interest. More details: M&S personal loans Clydesdale and Yorkshire Banks The loan rate is available to new (you must be over the age of 23) and existing customers. Borrowing between £1,000 to £2,999 is charged at 23.9pc, loans from £3,000 to £4,999 are 17.9pc, loans from £5,000 to £7,499 are 6.4pc and loans from £15,001 to £25,000 are charged at 6.6pc. More details: Clydesdale personal loans More details: Yorkshire personal loans Others: Barclays Bank: 4.9pc on loans between £7,500 and £15,000. Borrowing £12,000 over three years will cost £359 a month or £928 in total interest. Derbyshire Building Society: 5pc on loans between £7,500 and £15,000. Borrowing £12,000 over three years will cost £359 a month or £947 in total interest. For alternatives to personal loans, read our 2014 debt plan. For the all the latest personal finance news, sign up to our weekly email here.