Focus on: M&S offers new leading loan rate

One of the things that many people find off-putting about market-leading personal loans is that you generally have to borrow at least £7,500 to secure the lowest rates of interest.

That remains the case, with the current market leader, Sainsbury’s Bank offering Nectar cardholders the chance to borrow between £7,500 and £15,000 over a one to three-year period at a representative APR of just 5.8%. You can read more about that here.

However, the good news for consumers looking to borrow less than that at a low interest rate, is that M&S Money has stormed onto the market with a fantastic new representative APR of 7.3% on loans of between £5,000 and £7,500 with a borrowing period of anything between one and five years.

The new headline rate marks a huge reduction on its former 12.9%, and puts it well ahead of its rivals in the same category.

We take a closer look at the offer and ask whether it’s right for you.

What’s the deal?

The new 7.3% headline rate (which is fixed for the duration of the loan) from M&S Money is the best on the market for so-called midsize loans of between £5,000 and £7,500. To avoid confusion, note that when you click through to the M&S website, you will be greeted by its lowest loan rate of 6% APR, but this actually only applies to larger loans of between £7,500 and £15,000.

Nevertheless, anyone looking for a loan of less than £7,500, and needing up to five years to pay it back, will be pleased to learn of this great new 7.3% deal.

You will need to borrow at least £5,000 to benefit, though. Loans of between £3,000 and £4,999 come with a much higher representative APR of 16.9%.

Other advantages include the fact the terms give you the option to defer your repayments for the first three months. However, opting for this perk will mean paying interest for three months longer than is necessary.

You can choose to make your repayments by direct debit from your current account and there are no arrangement fees to take into account for setting up the loan.

Any catches?

There is an early redemption charge, meaning that you cannot pay off the loan without penalty should you receive an unexpected windfall.

Certain boxes must also be ticked for you to qualify for the deal, which – just like most other market leading offers – is by no means available to everyone.

You must, for example, be a UK resident and either a homeowner or over the age of 30. Other qualifying criteria includes having a UK bank or building society account and a valid email address.

M&S also states that you must have an “excellent credit rating” to stand a chance of being accepted as a customer on the headline rate.

Consequently, you could be offered a loan at a higher rate or rejected altogether, making it inadvisable to apply if you know that your credit history is less than perfect.


This is a great offer for borrowers seeking a midsize loan of between £5,000 and £7,500.

It is also a flexible deal, allowing you to repay the loan over as little as 12 months or as long as five years, with the opportunity to defer the first three payments if you wish.

You can still get much better rates on larger loans, however, as long as you have a good credit score.

Top tip

If you are prepared to borrow a larger amount, M&S charges a representative APR of 6% (which is 0.2% higher than the market leading rate from Sainsbury’s Bank) on loans of between £7,500 and £15,000.

The advantage in comparison to the Sainsbury’s loan however, is that if you are looking for lower payments, you can spread them over four or five years, rather than being restricted to a maximum of three.

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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