MSE News: Tesco offers lowest loan rate on record

Former_MSE_Jamie

"The supermarket giant slashes its interest rate to just 5.2% APR, following on from new deals from its rivals..."

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Tesco offers lowest loan rate on record

Treadmill

An unsecured loan for less than a mortgage, disaster waiting to happen.

Stormchaser_2

Thanks Jamie, but you can bet the majority of people will not get it this low.

Some time back (before all our debts were paid off,) we were on the website of a certain bank (who we were a customer of at the time,) and they were offering 8.5% loans. We went to apply online and it came out at 13%!

I went to the bank and asked why, and they came up with some carp about how we 'already had some debt' (we did: about 6 grand's worth,) and so it changed the loan interest. We did not bother and chose to not get the thing we wanted the loan for.

My friend applied under similar circumstances, and the low loan rate of 7.5% with 'her' bank became 13.5% because she only wanted £5K. They said, to qualify for the low rate, the loan had to be a minimum of £15K. Go figure!!!

AHAR

Stormchaser wrote: »

Thanks Jamie, but you can bet the majority of people will not get it this low.

The majority of accepted applicants will get it that low.

somethingcorporate

AHAR wrote: »

The majority of accepted applicants will get it that low.

The difference between your statements is the word "accepted". You are both correct.

Most people won't get it that low and of those accepted the majority (51%) will get the headline rate.

Still, a difference of 0.1% will only change the institution a person gets a loan from, it's hardly big potatoes when you consider the long-term costs of unsecured borrowing.

Chrissie72

51% may be classed as a majority officially, as 'majority' effectively means the greater number, but it also suggests/means 'most,' which couldn't be further from the truth. Virtually only half of applicants will get it at the low rate they advertise, so it's false representation imo. Although I'm sure there is a tiny bit of barely legible smallprint somewhere where it says briefly 'it depends on the individual's circumstances.'

5555tt

Its only the lowest cause ,inflation is massivevely low than it was at the end of boom yrs
Stop lying Louis,& stop sayn everything only takes a minute to check or do

davidgmmafan

The threshold used to be higher can anyone explain how and why it changed?

jonesMUFCforever

I wonder how they are financing this?
I thought it was just banks who had access to the cheap money from Bank of England.
Do Tesco bank have access to this too?

I will repeat what many on here have posted - only people with A1 credit files will get anywhere near this rate.
Just wait till Wednesday though I hear most banks will come out with New year ''special'' rates due to this cheap money.

Ultimately the people who lose out are savers - the banks no longer have to fight for savings from customers due to this scheme - savings rates have never been this low.

chris-j

You have to wonder about Europes consumer policy and how it adversely affects UK consumers. Used to be that headline rate was for 67% of applicants, Europe get involved and it goes down to straight majority.
APR rates can be confusing but at least you compared like with like, now you have stupid representative rate which includes other charges but skews actual interest.
Belgium consumer group complains about insurance being determined by gender and, despite significant evidence indicating it makes difference, Europe decide it is unfair - do consumers benefit, not really - women's car insurance goes up, men's does not really come down much to compensate, men's annuities pay less, women get no more.
How on earth is any of this beneficial to consumers.

threadneedle_2

Checked my credit history before trying to get a Tesco loan. Credit history good. Applied for £7500 over 5 years.
Completed the Tesco application and was offered not 5.2% but 12.5% interest!
Thought I would give my bank's (Barclays) offer of 6.2% online a try and was offered a pre-approved loan (immediate) at 10.9%. When I rang Barclays for an explanation, I was told that as I had a really good stable history and fulfilled the criteria for the low 6.2%, I could have a loan at 9-10%. I was told that not many people get the 6.2% rate anyway.
These really low rates appear to be given to a small select few.
Will my local pub be advertising beer at 10p a pint soon, but when I order the foaming brew I am startled to find I am denied? Gosh, the cheap beer is only for a few people chosen by the landlord.!