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Savvy Britons Taking Advantage Of Record Low Interest Rates – Around £6.5 Billion Borrowed By Consumers In 2013 To Consolidate Debt 

21 May 2014

 

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

Sainsbury’s Bank Loans reveals around one in five (18%)1 people wrongly believe you are not allowed to switch a loan balance to another provider during its term, missing out on significant savings. The supermarket bank is urging people thinking about consolidating existing borrowing to shop around, even if they have an existing loan.

Analysis of loans data by Sainsbury’s Bank Loans reveals that an estimated 637,000 consumers collectively refinanced as much as £6.5bn unsecured debt in 20132, potentially materially reducing the total cost of their borrowing as loan rates plummeted to record low rates last year3.

The analysis indicates that consumers who arranged unsecured loans in the first part of the year frequently did so for the purpose of debt consolidation, with 36.2% of the money borrowed in the first quarter of 2014 for this reason, worth approximately £2.2 billion in total. The average loan size for debt consolidation during this period was £10,334, 10.1% higher than the average loan amount borrowed during this period.

To help consumers better understand the total cost of their borrowing and see if they might benefit from the leading rates offered by Sainsbury’s Bank, the supermarket bank has created a loan switcher calculator (www.sainsburysbank.co.uk/loans), available on its website.

Simon Ranson, Head of Banking at Sainsbury’s Bank said: “When consolidating borrowing we’d encourage people to think about all aspects of their finances. For example, if they have a number of credit cards including store credit, as well as overdrafts and existing loans. Having all of your borrowing in one place with a rate you’ve shopped around for could have a significant impact on your monthly outgoings.

“For example, a customer borrowing £10,000 over five years today at our leading rate of 4.5% APR could get an APR that’s 2.2% lower than the best available in 2011, saving them £115.80 per year in interest repayments3.

Sainsbury’s Bank offers loans between £1,000 and £25,000 from 4.5% APR4 to meet a wide range of needs. In addition to highly competitive rates, customers taking out a Sainsbury’s Bank loan also benefit from:

Sainsbury’s Bank has a Price Promise Guarantee on its Standard personal loans, which means that if you are offered a “like for like” loan that has a lower APR (Annual Percentage Rate) with another lender Sainsbury’s Bank will beat it.5

For further information on Sainsbury’s Bank Loans call 0800 169 8502, log on to www.sainsburysbank.co.uk/loans or pick up a leaflet in Sainsbury’s.

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Notes to editors

(1) ICM interviewed a nationally representative sample of 2,039 GB adults aged 18+ via the online omnibus between the 25th-26th April 2014.

(2) Based on analysis of Sainsbury’s Bank’s 2013 loans book and market share.

(3) Sainsbury’s Bank reviewed best buy rates as recorded by Moneyfacts, between May 2011 and May 2014.

(4) Rate correct at date of issue. Sainsbury’s Bank reserves the right to vary rates without notice.

(5) Multiple credit searches may make obtaining future credit more difficult. Full Price Promise Guarantee Terms and Conditions available www.sainsburysbank.co.uk/loans: 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.  You 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 you to provide the original agreement. If you provide an original document, we will return this to you within 5 days of assessing your claim. Photocopies will not be returned and will be securely destroyed by us. Sainsbury’s will verify the validity of your claim within 5 business days of receiving your request and notify you 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 you at the time of the claim. immediately following completion of studies (for example, student loans or graduate loans). If your claim is successful we will reduce the APR on your Sainsbury’s Loan to below that of the alternative lender by 0.1%. e.g. If the alternative lender formally offers you a rate of 6.9% APR, your 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.

For further information, please contact:

Tom Wilson, Citigate Dewe Rogerson on 020 7282 2842
Lorna Gilmour, Sainsbury’s Bank on 0131 338 2863

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 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 is a member of the Financial Services Compensation Scheme.