Shave months off your loan term and pocket the savings

Shave months off your loan term and pocket the savings

26 March 2018

Sainsbury's Bank is urging people to do some old fashioned arithmetic
 


Sainsbury’s Bank is urging people who are planning to consolidate their debts to spend a little time doing some old fashioned arithmetic in order to make savings and reduce their loan term. The Bank’s research(1)  indicates that one in ten UK adults (9 per cent) could take out personal loans for debt consolidation purposes before the end of March 2018.

Sainsbury’s Bank customers tend to pool borrowing from various places including credit cards, other loans and store cards and borrow on average around £12,000(2) for debt consolidation. The Bank’s loans can be taken over a range of terms but it is urging customers to consider whether they could be debt free sooner.

Paying your debts off as quickly as possible can mean you’re back on an even keel sooner.  So it’s worth doing your homework and working out if you can find a little more to put towards the monthly repayments which will help you lower the loan term. It could mean the difference between paying back your loan over four years rather than five for example and settling your debts sooner.

According to the research(1), the sacrifices that most people are willing to make to pay off their debt early include cutting back on takeaways and meals out (22 per cent); spending less on entertainment and eating out (21 per cent), and taking their own lunch to work (17 per cent).

Robert Oag, Head of Loans at Sainsbury’s Bank said: “Personal loans can be a great way to consolidate debt, allowing borrowers to lower their monthly outgoings and manage their monthly payments with a single loan provider.

‘Spending a bit of time thinking about the monthly repayments and what you can afford, coupled with what you could maybe forgo each month, one less take away maybe, could not only save you interest, but could mean you’re debt free sooner.”

The below is a comparison for a £12,000 loan at the Bank’s representative 3% APR for customers with a Nectar card.(3).

 Term  5 years  4.5 years  4 years  6 months earlier  12 month saving
 Total amount payable  £12,924.60  £12,831.48  £12,739.20  £93.12 total saving  £185.40 total saving
 Monthly payment  £215.41  £237.62  £265.40  £22.21 more into loan a month = 6 months earlier  £49.99 more into loan a month = 12 months earlier

 

For further information on Sainsbury’s Bank Loans visit www.sainsburysbank.co.uk/loans or pick up a leaflet instore at Sainsbury’s.

Ends

Notes to Editors

This press release is information for journalists only and is not intended to be a promotion to be acted upon by consumers.

For more information, please contact Jennifer Johnston-Watt on 0131 286 0010 or email [email protected]

(1) Sainsbury’s Bank commissioned Opinium Research to survey 2,003 nationally representative UK adults aged 18+ between 16th to 19th February 2018. Opinium Research is a member of the British Polling Council and abides by its rules.
(2) Sainsbury’s Bank loan data Jan 2017 – Jan 2018 looking at loan purpose and average amount borrowed
(3) Annual Interest Rate (fixed) is 3.00% p.a., with a representative 3.0% APR based on borrowing £12,000 for customers with a Nectar card. At least 51% of accepted loan applicants will be offered the Representative APR advertised for the particular loan amount and term, or a lesser APR. All other accepted applications will be offered a higher rate. The APR we offer is determined by the details you supply whether you have a Nectar card and the loan you are applying for, along with an independent verification of your credit and repayment history and will range from 2.9% to 25.9% APR.

Sainsbury’s Bank:

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Sainsbury’s was the first major British supermarket to open a bank, commencing trading in February 1997. Benefiting from a fantastic, trusted brand that enables us to combine the shopping experience with personal finance, Sainsbury’s Bank provides a range of quality products including insurances, credit cards, savings and loans. Our proposition is to make shopping more rewarding by offering customers great products at fair prices, while consistently rewarding shoppers for their loyalty and being easy to do business with at all times. Our products consistently top best buy tables and regularly win awards for quality, price and service.

Sainsbury's Bank plc. Registered Office, 33 Holborn, London EC1N 2HT (registered in England and Wales, no 3279730) is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (register no. 184514). Sainsbury's Bank plc is covered by the Financial Services Compensation Scheme (FSCS).