Last chance for cheapest-ever loan

Updated: 

stacks of golden coins  euros

Sainsbury's is pulling its market-leading loans on Friday, so you need to move quickly to take advantage.

The Sainsbury's loan sale is coming to an end this Friday, which means you only have until the end of the week to take advantage of the cheaper rates.

The 30-day sale has seen a range of loans reduced, with the introduction of two market-leading rates for a loan of between £7,500 and £15,000.

The changes apply to the Shopper Standard loans and the Shopper Reward loans. To access these rates you will need to have a Nectar card which has been used at least once in the last six months.

Loan sales

The major changes apply to medium-sized personal loans of between £7,500 and £15,000. Pay it back over three years and you can get a rate of 4.5%, though this will move to 4.6% after Friday.

Loans paid back between three and five years will increase to 4.7%, from the current rate of 4.6%, and those paid back over a term of longer than five years will cost 6.7%, an increase from 6.6%.

Similar changes will occur on the Sainsbury's reward loans, which give borrowers extra Nectar points. For those paid back in up to three years the rate will increase to 4.9%, from 4.8%, and those repaid over terms of between three and six years will cost 5%, up from 4.9%.

Best rates for medium-sized loans

Some of the most competitive rates can be found in the medium-sized loan range.

After Friday the best rate available on loans of between £7,500 and £15,000 will be 4.6% from Derbyshire Building Society, and Clydesdale and Yorkshire banks. Taking out £10,000 over a five-year term with one of these loans would cost a total of £11,187.60.

Loan

Representative APR

Total amount repayable

Sainsbury's Bank Shopper Standard Loan

4.6%

£11,187.60

Derbyshire BS Online Personal Loan

4.6%

£11,187.60

Clydesdale Bank Personal Loan

4.6%

£11,187.60

Yorkshire Bank Personal Loan

4.6%

£11,187.60

Zopa Personal Loan

4.7%

£11,226.60

M&S Bank Cardholder Loan*

4.7%

£11,226.60



*M&S Bank customers only

Small loans

If you're after a smaller loan, there's also been some price activity.

Hitachi has lowered the rate on its personal loan for sums of between £5,000 and £7,500 to 5.9%. Only Zopa, the peer-to-peer lender, Clydesdale Bank and Yorkshire Bank top this rate with a cheaper deal of 5.8%.

If you took out £5,000 with the Hitachi loan and paid it back in five years it would cost a total of £5,764.80, or 60 monthly payments of £96.08.

Here I've listed the top five rates in this range.

Lender

Representative APR

Total amount repayable

Zopa Personal Loan

5.8%

£5,758.20

Clydesdale Bank Online Personal Loan

5.8%

£5,758.20

Yorkshire Bank Online Personal Loan

5.8%

£5,758.20

Hitachi Personal Loan

5.9%

£5,764.80

Santander Loan

6%

£5,777.40

M&S Bank Cardholder Loan*

6.1%

£5,790.60

Sainsbury's Bank Shopper Standard Loan

6.1%

£5,790.60

HSBC Personal Loan**

6.1%

£5,790.60

M&S Bank Personal Loan

6.2%

£5,803.80


*M&S Bank customers only

**HSBC current account customers only

Compare the cheapest personal loans

Fall in rates

Interest rates on personal loans have been steadily falling during the past year.

The greatest change has been seen for smaller loans of £5,000. The average interest rate has dropped by 2.5% on a loan taken out over three years.

Average loan APR*

Jan-13

Jan-14

Percentage difference

£5,000, over three years

12%

9.5%

2.5%

£7,500, over five years

7.2%

6.2%

1%

£10,000, over five years

7.0%

6.1%

0.9%

£15,000, over five years

8.0%

6.7%

1.3%


*source: Moneyfacts, 24/01/2014

Compare the cheapest personal loans

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