Sainsbury’s Bank has ended its interest-rate battle with Marks & Spencer Money (M&S) by increasing its rate on loans over £7,500 by 0.3%. However, the new deal is still much better than the rates offered by most high street banks.
Unsecured personal loans now 7.1% or 7.2% APR
The increase brings the interest rate (APR) on personal loans above £7,500 up to 7.1% for repayment periods of one to three years (for Nectar card holders only). Loans over longer period attract a slightly higher APR of 7.2%, still amongst the best loans in the Which? personal loans table for medium loans, second only to Marks & Spencer Money. The offer applies to personal loans between £7,500 and £14,999.
To soften the blow, all nectar cardholder loans between £7,500 and £14,999 will receive double Nectar points plus a £30 Sainsbury’s voucher.
Sainsbury’s Bank loan rate is still competitive
Which? credit expert Martyn Saville commented: ‘It was only a matter of time before the price war over unsecured loans had to come to an end. The three market leaders for medium loans, Sainsbury’s Bank, M&S Money and Tesco Finance, have all reduced their rates in recent months, often within hours of each other.
‘With Libor (the rate at which banks lend to each other) creeping slowly upwards, it’s unlikely that the best loan rates will fall any further. If you’re thinking about taking out a loan in the coming weeks, I’d get in quick before other lenders follow Sainsbury’s example. With M&S Money’s rate now the only one below 7%, I wouldn’t be at all surprised to see this rate go up in the coming days, too.’
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