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33% Of Personal Loans In The New Year Will Be For Debt Consolidation

26 January 2015

33% of personal loans in the New Year will be for debt consolidation(1)

Research(1) from Sainsbury’s Bank Loans suggests that up to 212,000 people could take out personal loans worth up to £2.2 billion in the first three months of the year for debt consolidation.

The Bank estimates(1) that this figure could be equal to around a third (33%) of all personal loans taken out during January, February and March. The average loan size taken out to consolidate debts is estimated to be around £10,300.

To those looking to consolidate debts, Sainsbury’s Bank is encouraging them to ensure the monthly repayments will be lower under the terms of the new loan and that they can afford to cover any fees from their old lenders, before going ahead.

Simon Ranson, Head of Banking at Sainsbury’s Bank said: “Using a personal loan to consolidate debts can be a good way to bring monthly repayments down and simplify them under one provider. However, it’s crucial you make sure you’re going to see a real advantage to moving, so work out if the total interest paid on the balance at the end of the repayment term will be lower, or at least comparable.”

Sainsbury’s Bank has a loan switcher calculator to help customers gauge whether they might save money by switching their existing loan to a Sainsbury’s Bank loan.

The Bank, which consistently offers competitive interest rates on personal loans, also has a Price Promise Guarantee. This means that if a customer is offered a “like for like” loan that has a lower APR with another lender, Sainsbury’s Bank will beat it by 0.1%. This is subject to qualifying for the Offer and customers must not have already accepted its Standard Loan offer by signing and returning a Sainsbury’s Loan agreement(2). Car dealership loans and finance excluded.

For further information on Sainsbury’s Bank Loans visit www.sainsburysbank.co.uk/loans or pick up a leaflet instore at Sainsbury’s.

Ends

This press release is information for journalists only and is not intended to be a promotion to be acted upon by consumers.

Notes to Editors

(1)    Based on analysis of loans issued by Sainsbury’s Bank between December 2013 and November 2014. Analysis is based on all loans that were taken out either all or in part for this purpose, including paying off overdrafts and credit cards. Figures represent estimates for the first three months of 2015 (January, February and March).

(2)    Multiple credit searches may make obtaining future credit more difficult. Price Promise Guarantee Terms and Conditions: The Price Promise Guarantee (“the Offer”) is only available to individuals who successfully apply for (and subsequently open) a Sainsbury’s Standard Loan (“the Loan”). The offer does not apply to any Sainsbury’s Reward Loans. Claims under the Offer must be received within 28 days after the Sainsbury’s Loan has been approved. Claims under the Offer will not be accepted after the Sainsbury’s Loan offer has been accepted by signing and returning the Sainsbury’s Loan agreement.  Customers must provide us with a written offer from the other lender in the same name as the Loan offered by Sainsbury’s. In most cases a photocopy of the loan agreement will suffice but we may ask customers to provide the original agreement. If customers provide an original document, we will return this to the customer within 5 days of assessing the customer’s claim. Photocopies will not be returned and will be securely destroyed by us. Sainsbury’s will verify the validity of the customer’s claim within 5 business days of receiving the customer’s request and notify the customer of the result. A “Lower rate” means a lower Annual Percentage Rate (APR) of an alternative unsecured, fixed rate loan from a lender, compared on a “like for like” basis. We will assess “like for like” based on features such as, but not limited to, length of loan, fixed loan amount, repayment structure (including interest and set up fees (if any). The Lower rate must be available to the general public and be verifiable by Sainsbury’s. The Lower rate must have been offered and must still be available to the customer at the time of the claim. The Offer does not apply to the following rate or loan types:

Loans where the funds are not available for immediate use
Discount rates offered only to members of groups or individuals who meet previously specified criteria;
Rates that are not immediately available, promotions that are not at everyday rates and products which are sold under different terms and conditions, such as special financing (i.e. dealer loans, promotional loans for specific goods);
Loans that are secured on land, investments or goods.
Any personal products being charged interest at a variable rate;
Any personal and non personal loan type products including but not limited to lease, contract hire, hire purchase or conditional sale agreements;
Loan agreements where interest has been temporarily or permanently suspended (including deferred payments and 0% loans for an initial period);
Loan agreements where the funds are to support periods of study, or the period immediately following completion of studies (for example, student loans or graduate loans).

If the claim is successful we will reduce the APR on the Sainsbury’s Loan to below that of the alternative lender by 0.1%. e.g. If the alternative lender formally offers the customer a rate of 6.9% APR, the claim is successful and 6.9% APR is lower than our rate offered we will reduce our offer rate to 6.8% APR. We reserve the right to modify or cancel the Offer at any time without prior notice.

Sainsbury’s Bank

To view our latest press releases and product information, please visit the Sainsbury’s Bank online media centre at www.sainsburysbank.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 Bank 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 Bank plc. Registered Office, 33 Holborn, London EC1N 2HT (registered in England and Wales, no 3279730) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). Sainsbury’s Bank plc is covered by the Financial Services Compensation Scheme (FSCS).