Borrow up to £35,000 with Sainsbury's

Supermarket bank the first to offer personal loans over £25,000 to new and existing customers.

Sainsbury’s Bank is now offering personal loans of up to £35,000.

The supermarket bank has increased its maximum lending limit on its Standard Loan from £25,000 to create a new ‘larger loan’ tier for those looking to borrow more.

The move makes Sainsbury’s Bank the only provider to offer personal loans over £25,000 to both new and existing customers.

The rates

The Sainsbury’s Bank Standard Loan is available on borrowing between £25,001 and £35,000 at a rate of 6.9% APR when taken out over two to five years.

Those with a Nectar card can get access to a lower rate of 6.8% APR if they are prepared to borrow over two to three years.

Nectar points and bonus Nectar point promotions won’t apply to this offer, but the loans will come armed with Sainsbury’s Price Promise.

This guarantees to undercut your best offer on a like-for-like loan by 0.1%.

What will a £35,000 loan cost?

The table below shows the cost of borrowing £35,000 through Sainsbury’s new larger loans over a range of terms.

*Lower rate available to Nectar cardholders only

As you can see the monthly repayments on a loan of £35,000 is pretty steep even when spread across a term of five years.

You’ll need to make sure you can afford to make the payments each month before applying.

You should also bear in mind that lenders are only required to offer their best rate to 51% of those that successfully apply. So you could be part of the 49% that are offered a worse rate meaning you will have to pay more.

How do Sainsbury’s larger loans compare?

No other personal loan provider offers loans above £25,000, apart from Barclays.

Barclays offers personal loans of up to £35,000, but only to existing customers who hold a current account, savings account, Barclaycard or mortgage product.

The bank charges 7.8% APR on loans from £15,001 up to £25,000 or 8.5% on loans from £25,001 to £35,000.

So Sainsbury’s new larger loans beat what’s already available on the market by a long way.

However, Barclays like Sainsbury’s also offers a price guarantee. It promises that if you find any like-for-like loan with another provider Barclays will match it and give you £50.

So if you were eligible for both, you could play the two lenders off against each other to get a better deal.

However, this involves applying for two loans which doesn’t look great on your credit record.

Is a £35,000 personal loan worth going for?

The larger loans on offer from Sainsbury’s could mark a new era in the personal loan market.

Should other providers launch similar products offering borrowers between £25,001 and £35,000, the rates could become more competitive. However, as it stands they are pretty expensive compared to large loans of between £15,000 and £25,000.

The best rate in this tier is 4% from First Direct, reserved for 1st Account customers or 4.8% from peer-to-peer lender Zopa, open to all.

So if you’re looking to borrow just over £25,000 you may be better off opting for one of these deals and making up the rest via a 0% purchase credit card or even a loan from a family member or friend.

Here are the best rates available when borrowing £25,000 over five years.

*Available to 1St Account customers only

**Available to HSBC current account customers only

***Available to M&S Credit Card, M&S Chargecard and M&S Budgetcard holders only

Compare personal loans

More on banking and borrowing:

The best credit cards for Christmas

The UK postcodes with the most debt

The best 0% balance transfer credit cards

M&S Bank launches its lowest-ever loan rate