Time running out to take advantage of Sainsbury’s Bank loan rate sale

The clock is ticking if you want to take advantage of the discounted loan rates on offer as part of Sainsbury’s Bank’s personal loan rate sale.

Sainsbury’s has cut rates across the three types of loan it offers (Standard Nectar, Reward Nectar, Non Nectar) but the discounts are only in place until 30th June.

Standard Nectar loans offer the lowest rates, and are only available to shoppers that have used their Nectar cards in the last six months. Nectar Reward loans are also only available to cardholders, but come with a higher rate. Instead they offer 5,000 bonus Nectar points and entitle the borrower to double Nectar points at Sainsbury’s for two years. The Non Nectar loans are for borrowers without a Nectar card.

With that in mind, here’s how the rates are changing on the different types of loan across the main loan terms for small loans of between £5,000 and £7,499.

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Different loan sizes

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 means for medium-sized borrowing between £7,500 and £15,000.

As you can see, it’s worth grabbing yourself a Nectar card and quickly using it in order to qualify for the Standard Nectar loans as they are 0.1% cheaper if you’re borrowing over a shorter term.

So how do these loans compare to the rest of the loans market?

How Sainsbury’s compares

Lenders have been locked in a desperate race to the bottom for some time now, with record-low rates launched a number of times this year already.

If you’re taking out a loan of £5,000 over 36 months, here are the best deals right now.

Borrowing £5,000 over three years

So while the Sainsbury’s loan is competitive, it can be beaten by peer-to-peer lender Lending Works. Another peer-to-peer outfit, Zopa, offers the same rate as Sainsbury’s, though this works out a little more expensive because of the different ways that the fees and interest are calculated.

If you stretch that term to five years, here’s how the rates and repayments change.

Borrowing £5,000 over five years

Spreading your payments over this longer term sees the rate increase by 0.1%. Sainsbury’s again can’t take top spot, with Hitachi and Zopa both offering superior deals.

As the size of the loan gets bigger, the rates actually get smaller. This is the area of the personal loan market that’s seen the fiercest competition, so let’s see how Sainsbury’s compares when borrowing £10,000 over a three-year term.

If you’re going for a medium-sized loan over three years, then Sainsbury’s does boast a table-topping offer, though it is matched by Hitachi and M&S Bank (for existing customers). Again Zopa offers the same rate, though it will cost you a little more due to the different way fees and interest are calculated.

Here’s how the rates look when that term is extended to five years.

As you can see, once the term increases to five years the Sainsbury’s deals are not quite table topping.

How to get an even lower rate from Sainsbury’s

There’s a sting in the tail here though, in the form of Sainsbury’s Price Promise.

[SPOTLIGHT]The Standard Nectar loans boast a Price Promise, which means that if you’re offered a like-for-like loan from another provider, Sainsbury’s pledges to beat if by 0.1%.

So in theory you could bag a rate of just 4% on medium-sized loans over three years.

To qualify you need to have applied successfully for the Sainsbury’s Standard Nectar loan, but not signed the loan agreement. You’ll also need to provide proof of a better offer within 28 days of receiving the Sainsbury’s offer.

Just be aware that applying for two large loans within a short space of time doesn’t look too good on your credit record.

I’ve been offered a higher rate!

Unfortunately the rates we’ve highlighted here won’t be offered to everyone, even if your application is approved.

That’s because lenders only have to offer the Representative APR to 51% of successful applicants. So if your credit record is anything less than spotless, don’t be surprised if you are offered a higher rate. Read How to repair your credit rating for tips on how to improve yours.

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