Whether you need a bit of extra cash to buy a new car, fund a summer wedding or pay off expensive debts, the good news is that the cost of borrowing between £7,500 and £15,000 has fallen to a record low 5%.
Sainsbury's Bank has cut the rate on its Sainsbury's Shopper Standard Loan from 5.1% to 5%, putting it at the top of the best buy table for loans of this size.
Here, we take a closer look at how the deal compares to the rest of the market.
What's the deal?
Sainsbury's Bank's new 5% loan rate is available on amounts of between £7,500 and £15,000 over a repayment period of between one and three years.
The cost of a £10,000 Sainsbury's Shopper Standard Loan taken out over the maximum three years would therefore be £772, based on 36 monthly payments of £299.21. And if another lender offers you a lower rate on a like-for-like loan, Sainsbury's promises to beat its offer by 0.1%.
The market-leading deal is also flexible. Borrowers taking out the loan can choose to start repaying it immediately or take a three-month repayment holiday at the start of the term.
Interest will still be charged from the start date of the loan if you choose, though, making it a slightly more expensive option.
Who's it good for?
This is the best deal for anyone needing to borrow between £7,500 and £15,000 over a period of up to three years, whether that's to make home improvements, fund a new car or even pay off more expensive debts.
The flexibility to start repaying the loan three months after taking it out may also appeal to those in need of a bit of financial breathing space.
The rate will be higher if you need to borrow more than £15,000 or less than £7,500.
The repayment term of one to three years is also relatively short - most of the loans in this category can be taken out over up to five years, allowing borrowers to spread the cost over a longer period.
Being offered the market-leading 5% rate is dependent on your personal circumstances, with some customers only qualifying for a higher interest rate.
The deal is also only available to Nectar cardholders who have had their cards swiped in-store or used them on the Sainsbury' website within the last six months.
What's the verdict?
This is the cheapest medium-sized loan deal available at the moment.
As such, it offers great value for money for the right borrower.
You will need to have the funds to repay the loan within a maximum of three years, though.
Anyone who would prefer to take longer paying back a loan would therefore be better off with a Clydesdale Bank Personal Loan, which is available over up to five years, at the marginally higher rate of 5.1%.
While this new loan rate from Sainsbury's Bank is the best on the market, there is still a cheaper way to borrow - especially if you only need to access a smaller amount of cash.
Many of the top credit cards available today offer 0% for an introductory period on balance transfers or purchases - or in some cases both.
If you are disciplined enough, you can therefore borrow money completely free of charge.
Cards offering 0% on purchases include the Tesco Clubcard Credit Card for Purchases, which gives you 16 months at 0% before its representative APR of 16.9% (variable) kicks in.
If you need a loan to pay off debts, meanwhile, the Barclaycard Platinum Credit Card with Extended Balance Transfer offers an incredible 26 months interest-free borrowing, subject to a 3.5% fee.
You must clear the balance in that time, however, to avoid the card's representative APR of 18.9% (variable).
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
Credit cards are notonly usefulfor seeing you through a tight spot, a growing number also offer some fantastic rewards – if you use them wisely.
As more of us get into the habit of paying off our credit card balance in full each month, reward credit cards have started to grow in popularity, prompting more providers to launch competitive deals onto the market.
Sainsbury's Bank, for example, recently unveiledboth its Low Rate Cashback credit card and its Low Rate Nectar credit card, which you can read about here.
What are reward credit cards?
Reward credit cards generally fall into two camps. The first allows you to collect points whenever you spend on your card which can then put towards the cost of your shopping, days out, holidays or flights for example.
Cashback credit cards, on the other hand, enable you to earn a percentage of the amount you spend as cashback. The amount of cashback you receive will depend on the provider but usually varies between 0.50% and 5.00%.
In most cases the cashback you've accrued will be credited to your account after 12 months, although you may be sent a cheque instead. Watch out though because some cashback cards also charge an annual fee which can eat into the money you make back. So weigh up whether you're likely to earn enough cashback to make paying this fee worthwhile.
To get the most out of your reward card, you’ll need to use it for your every day spending (food, clothes, nights out) so that you rack up more points/cashback. But the golden rule is to clear your balance in full every single month as the cards typically come with high annual percentage rates (APRs)which will far outweigh any rewards/cashback you've earned.
Growing appetite for rewards
The number of credit cards offering rewards or cashback has been creeping up in recent years. Research from Defaqto shows that in April 2007, there were 17 cards offering cashback. Today that number stands at 20. And there were 30 cards offering points schemes six years ago, compared to 46 today. Cards offering airmiles have increased from 11, in 2007 to 24 today.
However, the number of cards offering shopping rewards has actually declined considerably over the past six years, standing at 48 today compared to the 123 available in April 2007.
The best reward credit cards
So what’s out there? If you're after a points card,the Barclaycard Freedom Rewards Credit Card enables you to earn three points per £1 spent at selected Freedom partner stores (including Cafe Rouge, Strada, Currys PC World and BHS), two points per £1 spent at UK supermarkets and petrol stations and Transport for London expenditure, and one point for every £1 spent elsewhere.
Rewards start from 1,750 points for a £5 Freedom Rewards voucher. Andif you spend £500 in the first three months, you'll receive £30 worth of vouchers. These vouchers can be spent in a number of high street stores, including Boots, Next, Lakeland, and Homebase, or at restaurants such as Pizza Hut, Strada and Beefeater. Alternatively, you can spend them on days out at places such as Thorpe Park, London Zoo and Warwick Castle, or use them to pay for theatre tokens, a trip to the cinema or a holiday.
However, if you are a keen traveller, you might prefer a credit card that allows you to collect airmiles – or, as they are now known, Avios.
The Lloyds TSB Duo Avios credit card is in fact two credit cards – an American Express card and a MasterCard. American Express isn't accepted in all retailers, so you can use your MasterCard as a back-up. You'll receive one Avios point for almost every £1 spent on the American Express card and one Avios point for every £5 spent on the MasterCard. You will receive double points for any spending overseas.
For a limited time, you will also receive 15,000 Avios if you spend £500 a month for the first three months. To give you an idea of how far this will get you, you'd need 9,000 Avios for a return flight to destinations such as Nice, Amsterdam and Prague. But you will need to pay taxes, fees and charges on top. You can find out more about this card and alternatives here.
The best cashback credit cards
Those preferring to earn cashback should take a look at the Barclaycard Cashback card which offers 6.00% cashback for the first three months on your five biggest monthly purchases, up to a maximum value of £120.
After that you earn 2.00% cashback on your top five monthly purchases and 0.50% on everything else. You'll also get a 4.00% 'thank you' bonus every year on your top five purchases during the month you took out the card. But watch out for the £24 annual fee.
Alternatively, the American Express Platinum Cashback credit card offers 5.00% for the first three months and 1.25% after that. In addition, you will receive double cashback (2.50%) for one month every year, providing you have spent more than £10,000 in the previous 12 months. Again though, there is a fee with this card of £25 a year. You'll also need an annual household salary of £20,000 or more to apply for the card.
If you spent £1,000 a month on these cards, MoneySupermarket calculations show you could earn £221 over the course of a year with the Barclaycard, or £200 with the American Express card (taking the fees into account).
Homeowners are warned by regulator with regards to interest-only mortgages
A warning has been given to homeowners over interest-only mortgages, it has emerged on Thursday, 2nd May.
The City watchdog the Financial Conduct Authority (FCA), has claimed that 1.3million homeowners may not be able to afford payment for the interest-only mortgage when it matures, as referred to in one report by The Guardian.
This comes after the FSA carried out research on the matter.
The regulator found that as many as 2.6million mortgages of this kind will come to the end of their span from 2013 until 2041.
Based on their findings, the FCA has urged that action should commence with regards to interest-only mortgages.
The Chief Executive of FCA, Martin Wheatley, said: “Mortgage lenders have volunteered to contact their most at-risk customers with a 'wake-up call'… My advice to borrowers is to not bury your head in the sand – take action now.”
However, even though the watchdog is relating to its recent research, it has said that this type of mortgage works for the right individuals.
The way an interest-only mortgage works is by a person agreeing to make payments monthly for the interest, but no capital repayments. A borrower is to ensure they have investments operating in order to complete payment at the end.
These types of mortgages have benefitted many Brits in the last 20 years when it comes to getting a property. Reportedly, they have become a focal point for regulators of late it seems.
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