Sainsbury's drops cost of personal loans to 3.5%
This rate sees Sainsbury's undercutting Nationwide, M&S Bank, Cahoot, and First Direct, which were all the previous best-buys at 3.6%.
There is a caveat of course, but it could well suit some of you. You can borrow a 3.5% rate on loans of up to £19,999 if you agree that you'll pay back what you owe within two and three years. If it transpires that you need more time to pay, the rate rises to 3.6% for 3-5 years to repay. If you need 5-7 years to pay back your loan, then that'll come in a 5.6%.
There's no penalties for those of you who would like to make overpayments, but if you're going to clear what you owe early, you will be charged up to 58 days interest on the final balance.
Now, this is for those of you who already have a Nectar card. If you don't have one, Sainsbury's bank are charging a slightly higher rate of 3.6% for amounts between £7,500 and £15,000 (taken out over 1-5 years). If you don't have a loyalty card, and are repaying over 5 or more years, then you get a rate of 5.6%.
So if you're serious about getting a Sainsbury's loan, then it would be wise to get yourself a Nectar card, which you can do online for free. Make sure you use your loyalty card in store or online within six months of applying for the loan, or you won't get the discount.
Check out the Sainsbury's Bank loan situation here.