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MSE News: Lowest-ever loan from Sainsbury's fires up price war
Former_MSE_Helen
Posts: 2,382 Forumite
in Loans
"The supermarket's banking arm has taken top spot in the loan charts with lowest rate we've ever seen..."
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Comments
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Applied for a sainsburys loan 2 days ago at 5.7% and was offered 6.7%0
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In my view these low loan rates are just more evidence of savers being shafted by the banks.
Warning: In the kingdom of the blind, the one-eyed man is king.
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Consumerist wrote: »In my view these low loan rates are just more evidence of savers being shafted by the banks.
in what way? savers can if they shop around get 6 or 7 x base rate,borrowers are paying at least 11x base rates and in many cases 20 or 30 x base,reflecting the possibility/reallity of defualt0 -
I am sure you know as well as I do that the vast majority of savers are receiving 0.1% or, in some cases, less. That's the only reason 3% is available to those who shop around.in what way? savers can if they shop around get 6 or 7 x base rate,borrowers are paying at least 11x base rates and in many cases 20 or 30 x base,reflecting the possibility/reallity of defualtWarning: In the kingdom of the blind, the one-eyed man is king.
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Consumerist wrote: »In my view these low loan rates are just more evidence of savers being shafted by the banks.
Sainos currently pay 3.2% on fixed savings bonds over 5 years (roughly an average loan term). This new loan rate is 5.4%. That leaves a margin of 2.2%, out of which a profit must be made, as well as admin costs, bad debts etc.
Or you could use, say, First Direct's Regular Saver at 8%. Not entirely directly comparable, but their representative personal loan rate for loans between £7k and £15k is 6.1% APR. That's a margin of -1.9%.
I'm not really sure how savers are being screwed here. Base rates are low. Banks borrow money from savers at a lower rate and lend it at a higher rate. That is how banking works.urs sinserly,
~~joosy jeezus~~0 -
I hate websites where you fill in all the details to apply for a loan and when you press 'submit'it tells you that they are having technical difficulties and to try again later.loose does not rhyme with choose but lose does and is the word you meant to write.0
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I'm caught between a rock and a hard place.
Not working, but paying a low-rate tracker mortgage so want lending rates to stay low. Have a modicum of savings so want savings' rates high.
Overall, I think lower lending rates will benefit the economy, and I might benefit from that, too.0 -
I refer you to my previous post.JuicyJesus wrote: ». . . I'm not really sure how savers are being screwed here. . .Warning: In the kingdom of the blind, the one-eyed man is king.
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Consumerist wrote: »In my view these low loan rates are just more evidence of savers being shafted by the banks.
In what way? Savers are generally wanting risk free secured savings, so the rates will be lower. These loans from Sainsbury's are *unsecured* so the rate is higher.
If you're prepared to loan your money to major companies on an unsecured basis via bonds then you can get 5% to 7% and even higher. Look at the Enterprise Inns bonds for an example of the rates you can get if you go up the risk scale.
It's just the same with Sainsbury's loans - if you're higher risk then you pay more.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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