Asda becomes a true contender for loans

Asda has hit the headlines for offering a loan at a very low 5.9%. This offer is only available till February 15th, but it offers much better rates than other rival stores such as Tesco, Sainsbury, M&S and WH.Smith.

It is the second cheapest loan on the market and poses a real threat to lure customers away from banks and financial institutions.

A typically average loan amount is £5,000 and the ‘average’ rate around is 8.8%-so you can see what a great deal Asda are offering consumers.

Behind Asda on the list of ‘who is offering the best rates’ would be M&S at 6.6% on £5,000. This figure drops to 6.4% for amounts between £7,500 and £15,000.

Next come Sainsbury and Tesco who both charge 7.9% on £5,000. Sainsbury then charge 6.5% on £7,500 to £15,000 while Tesco charge 6.7% for applications received by internet and 6.9% for applications received by phone.

Both the Post Office and WH.Smith charge 7.9%

Since we see High Street banks and Building Societies’ figures like Alliance and Leicester (6.9%) and Northern Rock (6.1%), you can see what a great deal this is from Asda, showing just how much they would like your business.

Asda’s Director of Financial Services believes there is a gap in the market for their product.

Asda are happy to accept a lower margin than banks generally do, and are therefore in a position to offer their customers a ‘one-stop shop’ idea whereby they can obtain a loan along with their weekly groceries.

MoneyExpert.com’s Chief Executive reckons this is a fabulous deal with one of the best rates on offer anywhere. He does however remind consumers that not everyone will qualify for the best rate, especially if their credit record isn’t so good and recommends you check before you apply as to the likelihood you may be accepted.