Menu

£1.55 Billion Could Be Taken In Personal Loans Solely For Debt Consolidation

26 January 2011

During the first quarter of this year, Sainsbury’s Finance estimates(1) that up to 139,000 personal loans worth as much as £1.55 billion could be taken to consolidate debt.  This is equivalent to around 35% of the value of personal loans taken out during this period.

Sainsbury’s Finance, which currently offers one of the most competitive rates of 7.4% APR Typical on personal loans of between £7,500 and £14,999 for Sainsbury’s shoppers, says that the first quarter of any year can be a popular time for people to take out loans to consolidate debt.  However, it warns that many people do not shop around properly to find a competitive rate.  Indeed, its research(2) reveals that one in three people who take out a personal loan do not shop around, taking out the first loan they receive a quote for.

Steven Baillie, Head of Loans, Sainsbury’s Finance, said: “Taking out a loan to consolidate disparate debts from previous loans or credit cards can save a significant amount of money in terms of monthly outgoings, especially if you have debt with store credit cards which can have extremely high APRs.

“This year, as much as £5.8 billion(1) could be taken out in personal loans for debt consolidation purposes, and given that the difference between a market leading rate like ours and rates available on the high street could be as much as 19% APR,(3)choosing a non-competitive rate could cost you hundreds of pounds in extra interest repayments.”

Sainsbury’s Finance is currently offering a rate of 7.4% APR Typical on personal loans between £7,500 and £14,999 for Sainsbury’s shoppers. The offer is available to Nectar card holders and includes the added benefit of double Nectar points on shopping and fuel for two years (4). Those shopping at Sainsbury’s with their Nectar card already receive points equivalent to 1% off their shopping. Holding a personal loan between £7,500 and £14,999, one of the supermarket bank’s qualifying reward products, doubles this Nectar reward.

A customer with a qualifying Sainsbury’s Finance reward product who spends £100 a week in store will therefore receive the equivalent of £52 worth of extra Nectar points a year.

In addition to one of the most competitive rates in the marketplace, customers taking out a Sainsbury’s Finance Loan benefit from:

For further information on Sainsbury’s Finance Loans, call 0800 169 8502, log onto www.sainsburysfinance.co.uk  or pick up a leaflet in your Sainsbury’s supermarket.

– Ends –

For further information, please contact:
Phil Anderson
Citigate Dewe Rogerson
020 7282 1031

Notes to editors:

(1) Based on analysis of Sainsbury’s Finance personal loans book and its market share
(2) ICM research conducted amongst a GB representative sample of 2,000 adults from 15th to 17th October, 2010
(3) Based on a personal loan rate of 7.4% APR from Sainsbury’s Finance, and a rate of 26.9% APR from Barclays (Moneyfacts January 2011)
(4) Applicants have to be Nectar card users and will have to supply their Nectar card number on applying for the loan.
(5) Based on:
a. Double Nectar offer for two years – Nectar reward over term of loan calculated thus by – two years Nectar points at a value of 2% of in store spending, plus three years Nectar point redemption at 1% (usual reward with Nectar card) on a weekly spend of £100
b. £7500 loan repaid over 60 months, at 7.4% has total interest payments of £1504.20

Those shopping at Sainsbury’s with their Nectar card already receive points equivalent to 1% off their shopping. Holding a personal loan between £7500 – £14,999, one of the supermarket bank’s qualifying reward products, doubles this Nectar reward. Double Nectar points offer available to new customers only.

Sainsbury’s Finance:

To view our latest press releases and product information, please visit the Sainsbury’s Finance online media centre atwww.sainsburysfinance.co.uk/media.

Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997. Benefiting from a fantastic, trusted brand that enables us to combine the shopping experience with personal finance, Sainsbury’s Finance provides a range of quality products including insurances, credit cards, savings and loans. Our proposition is to make shopping more rewarding by offering customers great products at fair prices, while consistently rewarding shoppers for their loyalty and being easy to do business with at all times.  Our products consistently top Best Buy tables and regularly win awards for quality, price and service.
Sainsbury’s Finance recent awards include Best Overall Online Provider, Best Direct Personal Loans Provider, Best Online Credit Card Provider, Best Online Life Insurance Provider at the Your Money Awards 2010.

Sainsbury’s Finance is a joint venture between J.Sainsbury plc and Lloyds Banking Group.

For further information and general Sainsbury’s Finance enquiries customers can call the freephone number on 0500 40 50 60 or visit www.sainsburysfinance.co.uk