Although the cashback option on many personal loans may be attractive, it may not always provide borrowers with the best option, an expert has claimed.Personal loans which offer better value over the long-term are available, stated Michelle Slade, personal finance analyst at Moneyfacts.

The expert comments in the wake of two recently-launched personal loans with cashback features from Nationwide and Moneyback Bank.

Ms Slade found that by taking out a personal loan from Northern Rock, which offers a rate of 5.7 per cent, borrowers could save £214.03 over the Nationwide option, even with the cashback feature taken into account .

“While these deals are reasonably competitive, don’t be taken in by the cashback offer, as better deals are available which will save you money in the longer term,” she remarked.

“As always, make sure you shop around and look at the whole picture. Not only do interest rates vary between lenders, so does the cost and level of cover of the payment protection insurance .”

Moneyfacts claims to be an impartial advice service, for products such as personal loans, credit cards and mortgages .