Cost of unsecured loans at six year low
Sainsbury’s Bank has announced a flash loan sale, reducing the rate on its Standard Personal Loans from 5.1% to 4.9%APR Representative. During the sale, if the repayment term is between one to three years, the rate becomes 4.8% APR Representative. The sale ends at 3pm on the 18th November 2013 and is available to all customers with a Nectar card.
Analysis of market data undertaken by Sainsbury's Bank reveals that the cost of borrowing is at its lowest level in six years.
In 2007, the average best buy rate for an unsecured loan was 6.1%, rising as a result of unprecedented financial market conditions to a peak of 8.0% in April 2009. Since then, the average best buy rate for loans has steadily fallen, with the 2010 average of 7.7%, 2011 average of 6.7%, and 2012 average of 5.8%.
Currently, the best rate available on the market for an unsecured loan is 4.8%, 3.2 percentage points lower than the 8% best buy rate that was available in April 2009, when prices peaked. A borrower taking a £10,000 best buy loan with a three year repayment period today would repay a total of £10,740.60. This is £494.28 less than their total borrowing costs would have been, had they taken their loan in 2009, when they would have paid a total repayment of £11,234.88.
Simon Ranson, Head of Banking, Sainsbury’s Bank said: “In the current market, consumers have the opportunity to borrow at historic low rates. Someone taking a loan nowadays, be it for debt consolidation, home improvements or to pay for the purchase of a car for example, will pay several hundred pounds less than if they’d taken the loan a couple of years ago. People need to shop around before taking out a loan and make sure that they find a competitive rate as it could save them hundreds of pounds in lower repayments.”
Sainsbury’s Bank also offers a Price Promise Guarantee whereby if any customer successfully applies for its Standard Personal Loan, but then secures a better rate elsewhere with another provider, the supermarket bank will beat it. This is subject to the customer qualifying for the offer and they must not have already accepted a Sainsbury's Standard Loan offer by signing and returning the Sainsbury's Loan agreement.
Sainsbury’s Bank offers loans between £1,000 and £25,000 to meet a wide range of needs. In addition to competitive rates, customers taking out a Sainsbury’s Bank loan also benefit from:
A personally tailored repayment period, from 1 to 7 years
Fixed repayments for the whole period of the loan
Easy to apply
Money transferred directly to bank account
For further information on Sainsbury's Bank Loans log onto sainsburysbank.co.uk or pick up a leaflet in Sainsbury’s.