Personal loans used to pay for education
The cost of education increased by 5% in the 12 months to February 2010, which helps explain why, according to estimates by Sainsbury's Finance, a staggering £37 million was taken out in personal loans last year to help pay for school fees, university fees and general education costs. In total, the supermarket bank estimates that just under 4,400 personal loans with an average value of around £8,500 were taken out for these reasons.
In terms of how this breaks down, Sainsbury's Finance estimates that around 1,100 loans worth £12.25 million were taken out to help pay for school fees. The corresponding figures for university and college costs were 1,900 loans worth £13.56 million.
Steven Baillie, Head of Loans, Sainsbury's Finance said: "The cost of education has been rising. School fees rose by 5.9% in 2009, and the education component of the Consumer Price Index increased by 5% in the 12 months to February 2010. These rises can be hard to bear in difficult economic times, so it is not surprising to see many people taking out personal loans to help with this cost.
Parents and anyone paying for education, such as professional qualifications, need to make sure they are shopping around for the best loan rate available and not simply turning to their current account provider."
Sainsbury's Finance analysis of the latest Government data available reveals that between 2006 and 2008, households spent around £8.8 billion on education. However, this varied dramatically between homes in different regions. For example, those in London spent on average £770 a year, compared to £208 in the North West.
Sainsbury's Finance offers the most competitive personal loan rate - 7.8% APR typical - for loans of between £7,500 and £14,999 for Sainsbury's shoppers. Nectar card holders applying for a loan will also benefit from double Nectar points on their shopping for two years.
Sainsbury's shoppers taking advantage of the offer will be rewarded with double Nectar points on their shopping in store, online and in petrol filling stations for two years when taking out a loan from Sainsbury's Finance. For example, customers who spend £50 a week with Sainsbury's and have a Sainsbury's personal loan as well as a Nectar card would receive £52 worth of Nectar points a year.
In addition to the most competitive rate in the marketplace, customers taking out a Sainsbury's Finance Loan benefit from:
A personally tailored repayment period, from 1 to 7 years
Fixed repayments for the whole period of the loan
An instant decision
Money directly into your bank account
For further information on Sainsbury's Finance Loans, visit sainsburysfinance.co.uk.