Interest rates on personal loans are becoming an arena of sharp competition, forcing one lending newcomer to respond to price leadership.In January, National Australia Bank took steps to lift its poor market share in personal lending.NAB cut the variable rate on unsecured personal loans by up to 1.7 percentage points. NAB's rate is now 12.99 per cent on an unsecured loan. The bank also introduced a market leading offer of zero per cent for 15 months on credit card balance transfers .NAB said yesterday that, after that January offer,  it saw a 120 per cent increase, year-on-year, for the number of fulfilments for balance transfers.This may be good enough for now. NAB has brought the offer back to 12 months on regular credit cards.It extended the 15 month offer for premium cards only, a product still widely targeted.ANZ is another big bank to shave personal loan rates, though big banks are by no means the lowest priced.That accolade for a time belongs to SocietyOne, a consumer lender funded in part by Westpac.SocietyOne has began promoting a 1.25 percentage point rate discount that takes its lowest available rate to 9.8 per cent.An even lower rate is available from SocietyOne. It said its headline comparison rate for A-rated borrowers of 5.48 per cent was "lower than the current personal loan average for the Big Four banks."P&N Bank's communications manager, Kerrie Nayler, said: "it's a very competitive market and our strategy is to have a competitive rate in the market at all times."P&N's current secured rates is 8.5 per cent variable, with a comparison rate of 9.43 per cent.Rowan Dowland, general manager at bankmecu, said price was not much of a driver."Our volume of lending is very strong at present, driven more by an increased investment in advertising and on-line convenience rather than price discounting."Michelle Hutchison, analyst at comparison website finder.com.au, said of this trend: "It's great to see that some of the major banks are slashing their personal loan rates, particularly while the Reserve Bank has kept the cash rate on hold since August last year.""It's also unusual to see unsecured personal loan rates falling as these products behave more like credit cards and don't fall too often. "Personal loans, particularly unsecured, are competing with the credit card market. With the increase in competition for credit cards with incentives such as bonus points and better promotional rates for balance transfers and purchases, it's no surprise to see that personal loan providers are lifting their game."