Sainsbury’s Bank launches personal loan rate sale

The supermarket is slashing rates on small and medium loans for a limited period.

Sainsbury’s Bank is holding a sale on its small and medium-sized personal loans.

Rates have been slashed by 0.2% on borrowing between £5,000 and £7,499, while the cost of taking out a loan between £7,500 and £15,000 has been cut by 0.1%.

Sainsbury's rate sale applies to Standard Nectar, Reward Nectar and Non Nectar deals, until 30th June 2014.

Rates on sale

Here’s what the Sainsbury’s Bank rate sale holds for small loans between £5,000 and £7,499.

And here’s what Sainsbury’s Bank loan rate sale looks like on medium-sized borrowing between £7,500 and £15,000.

Sainsbury’s best rates are available on its Standard Nectar loans taken out over one to three years. Nectar cardholders that have used their card in the last six months can apply for these deals.

Sainsbury's Reward Nectar deals are also only available to Nectar cardholders, but come with slightly higher rates. That’s because they offer 5,000 Nectar bonus points and entitle the loan holder to earn double Nectar points for two years when shopping at Sainsbury's.

Those without a Nectar card tend to get worse rates via the Non Nectar deals.

How Sainsbury's compares on small loans

Let’s take a look at how the Sainsbury’s Bank rate sale impacts the small-sized loan best buy tables.

Borrowing £5,000 over three years

When it comes to borrowing £5,000 over three years Lending Works - a peer-to-peer lender - has the best rate of 5.3%. Sainsbury’s Bank offers the second best rate going at 5.4%, along with Hitachi.

Borrowing £5,000 over five years

But spreading repayments over five years sees Sainsbury’s offer become more expensive, leaving Hitachi and peer-to-peer lender Zopa with the joint-market leading rate of 5.4%.

How Sainsbury's compares on medium loans

Lenders are locked into a battle to top the best buy tables on medium-sized deals at the moment.

The loan sale from Sainsbury’s Bank comes hot on the heels of medium-sized loan rate cuts from Hitachi, which launched a record low rate of 4.1% last week in response to Sainsbury's dropping to a record low of  4.2% a week before.

Borrowing £7,500 over three years

Sainsbury’s rate sale means it is now joint market-leading on borrowing medium-sized loans taken out over one to three years.

Borrowing £7,500 over five years

But again, spreading repayments further sees Sainsbury’s offer drop down the best buy tables. On medium-sized borrowing over three years Hitachi and Zopa maintain the 4.1% rate.

Sainsbury’s Price Promise

Sainsbury’s Standard Nectar rates may not always be a clear leader when compared to other deals, especially when borrowing over terms longer than three years, but there is a way to secure a better rate.

The Sainsbury’s Bank Standard Nectar Cardholder Loan comes armed with a price promise which means you can get your best like-for-like offer from another provider beaten on small- and medium-sized loans by 0.1%.

You need to have applied for the Sainsbury’s Bank Standard Nectar Cardholder Loan and been accepted, but not signed the loan agreement. You also need to provide proof of a better offer within 28 days of receiving your Sainsbury's deal.

So if you manage to get the 4.1% APR on the market-leading Hitachi loan but also get accepted for the Sainsbury’s loan you can drive your rate down to 4.0%.

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