Irish Life & Permanent has launched a telephone and internet personal loans provider called Bluecubeloans. The new lender will offer unsecured personal loans from €5,000 up to €35,000.

Interest rates will rise from a variable 7.9 per cent APR up to 16.9 per cent APR and loans can be repaid over seven years. The company will operate via a low-call phone number and through a bluecubeloans.ie website.

The company is also offering payment protection policies for the loans, underwritten by Irish Life and Cigna Europe Insurance Co. The policies will cost about 5.2 per cent of a customer's monthly repayment.

The financial services group said that applications would be open to those with impaired credit histories, although these people will pay a higher rate of interest. Credit scoring will be used to determine applications.

IL&P has appointed Susie Thornton to head the business. She previously held a senior position at Permanent TSB's successful finance division.

A spokesman for IL&P said that Bluecubeloans would operate separately from Permanent TSB, the group's retail banking division, but would piggyback on its infrastructure. Permanent TSB is one of the biggest mortgage providers in Ireland and the largest player in the car finance market. It made an operating profit in 2006 of €202 million, up from €148 million a year earlier.

He rejected the suggestion that Bluecubeloans would cannibalise Permanent TSB's existing phone and internet banking operations. "This is a new channel that we believe will complement the existing product offerings from across the group," he said.

IL&P said it expected Bluecubeloans to be in competition with other internet loan providers and credit unions.