This offer, thought to be the lowest on record, is available to holders of its Nectar loyalty card borrowing between £7,500 - £15,000 for terms of 12 to 36 months.
The rate will be 2.9% APR (representative) for those without Nectar cards and for Nectar cardholders who are borrowing for up to 60 months.
Loan terms of up to seven years are available at 4.9% APR (representative).
For loans between £15,001 and £19,999, Nectar cardholders will pay 2.8% APR (representative) when they borrow for terms of 24 - 36 months.
Everyone else will pay 2.9% APR (representative) over terms ranging from 24 to 84 months.
Total cost of borrowing
As an example, the cost of borrowing £10,000 over 36 months at 2.8% APR (representative) is £289.78 per month, for a total of £10,432.08.
For £10,000 at the higher rate of 2.9% APR (representative) over 36 months, the monthly repayment is £290.20 and the total cost is £10,447.20.
Over 60 months, this loan would have a lower monthly repayment of £179.07 but the total repayment would come to £10,744.20.
Under the regulations governing financial promotions, Sainsbury’s is only obliged to offer its headline rates to 51% of those people who apply.
This means your financial circumstances will determine whether you are successful in getting the advertised rate.
If you apply for a number of loans unsuccessfully, this could affect your credit score.
To help counter this, MoneySuperMarket offers a loans smart search facility which will give you an indication of whether you’ll be accepted for a loan – without leaving any trace on your credit file.
Kevin Mountford, MoneySuperMarket’s banking expert, said the move by Sainsbury’s is likely to stir its competitors into action: “This is an aggressive move by Sainsbury’s in a market that is already highly competitive.
“It would be no surprise to see other lenders follow suit. What matters is that people don’t over-reach themselves and end up with debts they can’t afford to service.
“But if someone is sensible, this historic level of interest is highly attractive.”
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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