The UK’s first personal loan with a rate lower than 3% – How will it impact the market?

Sainsbury’s Bank have cut their personal loan rates to below 3% – a first for UK personal loans – with a rate of 2.9% now available on loans between £7,500 – 15,000 over 1 – 7 years. An even cheaper rate of 2.8% is also available for Nectar card customers.¹

In practical terms, borrowing £10,000 over five years could now cost as little as £744.20 in interest, and works out to £179.07 per month.

This is the 5th consecutive year that headline personal loan rates have fallen. Sainsbury’s now offer borrowing at less than half of the cheapest rate available five years ago – 6.2% in December 2011.

Offering the lowest rate in the market should give Sainsbury’s an edge in attracting new customers, especially on online comparison sites. However, since users can now check their eligibility online before applying, the interest rate is only one of a number of factors people consider before applying.

¹ Source: Moneycomms.co.uk

   

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