M&S launches lowest ever loan rate

If you’re looking to borrow a big lump sum, you couldn’t have picked a better time to do it.

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 The cost of personal loans has tumbled in the past couple of years – but now things have got even cheaper. M&S has slashed its rates right down to 3.6% on loans of between £7,500 and £15,000, which - if you want to borrow over a four or five-year term - is the lowest rate on record.

But don’t hang around if you want to apply as this deal is a limited offer which disappears next month.

What’s the deal?

M&S Bank is charging an annual percentage rate (APR) of just 3.6% if you want a loan between £7,500 and £15,000. You'll have as long as 5 years to repay your debt, which is what gives this deal the edge over the Sainsbury's personal loan (also now priced at 3.6% but with a maximum repayment term of three years - plus you'll need a Nectar card).

According to M&S, customers taking out a loan of £7,500 over the maximum 5 years will save more than £200 at today's rates, compared to taking out the loan the same time last year.

 Rates are higher on smaller borrowing though. You'll pay 4.9% on loans between £5,000 and £7,499, for example. 

M&S rates are the same for both new and existing customers, but will only be available until February 17, 2015.

Whichever size loan you want, you can choose repayment terms ranging from 12 to 5 years. You’ll also have the option of taking a payment holiday for the first three months, subject to the bank’s lending criteria.

Who’s it good for?

The M&S 3.6% loan rate is a fantastic deal for anyone looking for borrow a big lump sum, perhaps to make home improvements or to pay for a car.

This is a joint market-leading rate - and it's number one if you are looking for 4 or 5 year borrowing terms, so act fast if you think it's the deal for you.

Remember that the rate you’re offered may not be the same as the advertised rate though – only those with an impeccable credit history will qualify for the best rates.

Any catches?

You’ll have to hurry if you want to take advantage of M&S’s low loan rates – you’ve just over a month to apply before they disappear for good.

Although M&S Bank’s 3.6% rate on loans between £7,500 and £15,000 is fantastic, if you want to borrow a smaller sum, you’re going to have to fork out a lot more.

If you’re an existing M&S Bank customer, and you want to borrow between £1,000 and £2,999, you’ll have to pay an APR of 18.5%, rising to 18.6% if you’re a new customer.

You might therefore be better off with a money transfer credit card which allows you to pay cash into your current account interest-free.

For example, MBNA’s Platinum credit card won’t charge any interest on cash transferred into your current account for a whopping 24 months. The fee has recently been reduced to just 1.94% for money transfers if you go through through MoneySuperMarket, or 4% if you apply anywhere other than MBNA direct. You can read more about the deal here.


The 3.6% M&S loan rate is market-leading, so you won’t find a lower rate elsewhere.

New customers and existing customers get the same rates, which makes this deal even more attractive if you’ve never previously banked with M&S.

And if you’re still struggling to cover Christmas expenses, then the option of a three-month payment holiday at the start of the loan could prove invaluable.

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.

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