M&S Edges Out Sainsbury’s with Market Leading 3.3% APR Loan
Update: Sainsbury’s Hit Back with Cheapest Loans.
Sainsbury’s Bank delivered the UK’s cheapest personal loans across the 2015 year, but the supermarket giant has now been edged out in early 2016. M&S Bank may hold on to this position, or they may have set off yet another pricing war between the big players. For the best available banking rates you will of course have to opt for high loan sums, typically between £7500 and £15,000. We compare the banks at £10,000 over 1 and 2 years. Sainsbury’s came out best at 3.4% APR for their Nectar card holders, that calculated as £182.24 (12 months) and £352.40 (24 months). Without a Nectar the rate is 3.5% that translates to £187.64 and £362.72.
Marks and Spencer now come in at 3.3% APR. Their new market leading charges are £176.84 (12) and £341.84 (24). This 3.3% rate is available to all customers. However for smaller loan sums, there is a slight difference, whereby customers with a credit card, current account or existing loan benefit from a slightly improved APR. The M&S Bank is owned by HSBC whereby there is an equal split on profits. HSBC themselves have updated their direct prices. Whilst they also promote 3.3%, they are a few pence higher though at £176.98 (12) and £342.17 (24). It is interesting to see that they now consider non-banking customers instead of forwarding leads on to their sister-brand.
From running some checks we noticed that there had been some further market changes. Both Clydesdale and Yorkshire come in at 3.4%. Their charges are £182.28 and £352.49. This puts them just a few pence higher than Sainsbury’s (with a Nectar). The market leading building society (Nationwide) also now offers 3.4% to existing customers. They charge £182.24 and £352.40, whilst outsiders pay 4.6%. We also spotted that First Direct offer 3.4% calculating as £184.41 and £356.62. The difference here is that you must be an account holder to qualify. What is notable about First Direct is that they offer the cheapest £1000 loans at £39.93 (7.5%). This is amazing when you consider that some subprime lenders charge £1000+.
Obviously, you can see why the low rates are only available on large sums, since if someone charged 3.3% for £1000 they’d only make £17.70 in interest. The big takeaway from all of the discussed changes is the dominance of the UK’s leading banking group (HSBC Holdings). The business from First Direct and M&S Bank will certainly be helping them greatly. Here at Lenders4U, it is quite easy to keep track of the subprime rates that don’t tend to change too often. The banks on the other hand are very aggressive against their rivals. APR changes are constant that makes it tricky to keep track, but we’ll be keeping a close eye on developments over the coming months.