Personal loans drop to record low - but only for Nectar Card holders

Tom Wilson
4 October 2016

Personal loans have followed the base rate to new record lows, with Sainsbury’s Bank now lending at an unprecedented 3.1%, but only to people with a Nectar Card.

The rate is available to people borrowing between £7,500 and £20,000 who opt for a repayment period of three years or less.

Non-Nectar Card holders, or people who choose longer repayment periods will be offered 3.2% APR, which also is matched by Ikano Bank.


Sainsbury’s Bank has also cut the rates on its loans of between £20,000 and £25,000, from 3.4% to 3.2% for people repaying over three years or less, and from 3.5% to 3.3% for people choosing longer repayment periods.

These rates are representative, meaning most successful applicants will get the advertised rates, but others may be charged more.

Moneywise verdict

This 3.1% deal is the cheapest personal loan on record, though only by a whisker. It’s 0.1% cheaper than the next best deal, which will save you about £1 on monthly repayments with a £15,000 loan.

If you’re borrowing slightly than £3,000, £5,000 or £7,500, use our loan comparison tool to check if you might repay less overall by borrowing just over these amounts.

Borrowers might also consider a 0% balance transfer card if they’re consolidating existing debts, or a 0% purchase card to spread the cost of a big-ticket purchase.


Tesco Bank has the longest interest-free term for purchases at 28 months, while Halifax has an interest and fee-free deal for 25 months for balance transfers.

If you’re looking to clear an existing loan or overdraft, Virgin Money’s Money Transfer Card lends at 0% for 32 months, though the card has a 1.69% fee, equivalent to £50.70 when shifting a £3,000 balance.

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