Supermarkets in personal loans 'price war'
11 March 2010 16:06:23
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| Personal loan rates are being slashed by the UK's supermarkets. |
Sainsbury's announced earlier this week that it has cut its rate by 0.1% to 8.8% for loans between £5,000 and £7,000.
Consumers paying back a £5,000 loan at this level over a three-year period would have monthly repayments of £157.75 per month, with the overall total reaching £5,679.
Sainsbury's previously only offered loans to individuals with Nectar cards, but these can now be applied for at the same time as an attempt to secure a loan.
This rate is currently the best available on the market, with Alliance and Leicester's 8.9% deal, which involves £158 per month repayments over three years, coming in second place.
Meanwhile, Tesco has reduced its rate on loans between £7,500 and £14,999 to 8.2%, meaning monthly repayments over a five-year term are now £151.50.
Earlier this week, the Independent published details of a Defaqto study which revealed that the average APR on a £5,000 loan has increased from 9.8% to 13.9% in the past two years.
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