Tesco Bank offers competitive interest rates on personal loans — particularly on borrowing between £7,500 and £25,000. Repayment terms range from 12 months up to 10 years compared to a maximum of 5 years with many of its competitors.
Representative Example
Representative 6.1% APR, based on a loan amount of £10,000, over 5 years would give a monthly repayment of £193.02 and a total amount repayable of £11,581.20.
Pros
- Competitive representative APR (fixed)
- Two-month payment break available at the start of the loan (if eligible)
- Clubcard membership could have a positive impact on your application
Cons
- Representative APR for non-Clubcard members higher at 6.5%
- Longer borrowing terms restricted to certain loan amounts
- £12 late payment fee
Table of Contents
What are the pros?
- Competitive representative APR (fixed)
- Two-month payment break available at the start of the loan (if eligible)
- Tesco Clubcard membership could have a positive impact on your application
What are the cons?
- Best APRs offered reserved for Tesco Clubcard holders
- Maximum borrowing term restricted to loans of between £15,000 and £25,000
- £12 late payment fee
Key features
- Representative APR of 6.1% (fixed) on loans between £7,500 and £25,000 (with Clubcard)
Representative APR of 6.5% (fixed) on loans between £7,500 and £25,000 (without Clubcard)
Loan amounts ranging from £1,000 to £35,000 - Repayment terms of between 12 months and 10 years
Will I be eligible?
To be considered for a loan from Tesco Bank, you’ll need to have lived in the UK for at least three years, and be aged between 18 and 74.
The lender also requires its customers to have a regular income, such as a pension or salary.
If you are using the loan to consolidate other debt, you must be at least 22 years old.
Before you formally apply for a Tesco loan, you can use an eligibility checker to find out your likelihood of being accepted. This won’t impact your credit score.
What more should I know?
Before you settle on a loan provider, it’s important to compare different options from across the market to make sure you’re getting the best deal.
After selecting a lender, check the loan’s terms and conditions carefully. It’s a good idea to check whether the loan comes with late repayment fees, and whether you can pay it off early.
For example, Tesco Bank charges £12 for every late repayment, and allows customers to pay off the loan early with a fee of two months’ interest. You can also make additional payments at any time during the loan’s term at no extra cost.
Once you have made eight consecutive payments on the loan, you can apply to borrow more. Tesco Bank only allows one loan at a time per customer, so this additional money is used to settle and close your existing account, with the remainder being transferred to you as a new loan.
If you have questions that aren’t answered in the terms and conditions, you can contact the Tesco Bank’s customer service line on 0345 600 60.
When you apply for a loan from Tesco Bank online, you should receive an instant decision. Your application will either be approved, approved in principle, or rejected.
If it’s approved, you will be sent a credit agreement to sign — either virtually or in the post depending on your preference. Once the bank receives your signed agreement, the loan will be deposited into a bank account of your choice within 48 hours.
If your application is approved in principle, Tesco Bank will get in touch to ask you for additional information. Processing this information could take up to 10 days, after which you’ll get a final decision.
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Is a Tesco loan right for me?
If you want to borrow a lump sum over a set period and pay it back in fixed monthly instalments, Tesco Bank is a strong option.
Borrowing between £7,500 and £25,000 offers the most competitive APR of 6.1% (fixed). However, remember this is a representative figure, which means it could vary based on your credit score and personal circumstances. This lowest rate is also only potentially available after entering your Tesco Clubcard number.
If you plan to use a Tesco Bank loan to consolidate other debts, make sure this is the best solution.
What are my alternatives?
If you only need to borrow a relatively small amount — up to around £1,200 — you could make the purchase using a credit card with an introductory 0% interest rate.
This means you can avoid paying any interest on your borrowing, so long as you can pay off the credit card balance in full before the 0% promotional period expires. The length of this promotional period varies by card, and you might not be offered the term you see advertised. With any of these cards it is crucial to pay back the borrowing before the 0% grace period expires. Otherwise standard credit card APRs kick in and the debt can suddenly become expensive.
As with any kind of borrowing, remember to compare a wide range of deals before committing to a loan provider.
An eligibility checker will run a ‘soft search’ on your credit history, which estimates how likely you are to be accepted for each loan without leaving a mark on your credit file.
