Interest rates on personal loans have dropped to their lowest levels in four years, giving some light relief to borrowers.

Marks & Spencer Money is the latest provider to lower its rates by 0.4 per cent to 6 per cent on a loan of £10,000 over a five-year period.

Since the beginning of 2012, seven lenders including Santander, Barclays and Tesco Bank have lowered their rates on personal loans helping customers looking to consolidate their debts.

The lowest loan rate available a year ago was 8.4 per cent from Tesco Bank, two years ago it was 7.8 per cent from www.yourpersonalloan.co.uk, three years ago it was 6.8 per cent from Masterloan and four years ago it was 5.8 per cent from Moneyback Bank.

Rachel Springall, spokesperson for Moneyfacts.co.uk, says: 'It will be interesting to see whether other lenders follow suit over the coming weeks. Customers must shop around for the best deal as loan rates are continuing to fall in this competitive market.'

Current lowest rates on personal loans (based on borrowing £10,000 over a five year term)

This was written for our sister website, Moneywise