Sainsbury’s Bank loans review

6 min Read Published: 01 Dec 2023

Sainsbury's BankIt is important to find the right lender before you apply for a loan. We have written a series of independent loan provider reviews to help you pinpoint the lender that can the best product for your financial situation. Here we take an in-depth look at Sainsbury's Bank, the lending arm of the big-name supermarket chain. We will take you through the key features of Sainsbury's Bank loans, assess whether it could be the right choice for you and explain how to apply.

What is a Sainsbury's loan?

Sainsbury's was the first supermarket in Britain to set up a bank and now offers a range of financial products and services, including personal loans. The amount you can borrow and the interest rate you pay will depend on whether you have a Nectar card, with cardholders getting preferential terms and conditions.

Overall, Sainsbury's Bank loans are competitively priced and there is the potential for Nectar members to borrow up to £40,000, which is a considerably higher amount than is offered by most lenders.

Loan amount range £1,000 - £40,000¹
Loan term range 12 - 84 months
Representative APR 6.2%
How to apply Online

¹non-Nectar members can only borrow up to £25,000.

Sainsbury's loans - key features

  • Unsecured personal loans between £1,000 and £40,000, repayable over 1-7 years
  • Non-Nectar members can borrow up to £25,000
  • Money paid out in as little as 2 hours
  • You are unlikely to be approved if you have a poor credit history

What types of loans does Sainsbury's Bank offer?

Sainsbury's Bank offers unsecured personal loans that can be used for a variety of purposes, including debt consolidation, home improvements, to purchase a car or to fund a wedding. The fact the loan is unsecured means you don't have to put up a valuable item - most commonly your home - as collateral for the debt, which minimises the risk if you can't make the repayments. However, it is worth noting that Sainsbury's Bank charges a late-payment fee of £25 and missed or late payments are likely to have a negative impact on your credit score, with the ultimate risk that the debt may be passed on to a debt recovery agency.

A key differentiator for Sainsbury's Bank loans is the two-tiered approach it has to its lending criteria, with Nectar card members able to secure preferential rates and borrow larger amounts. If you are considering taking out a Sainsbury's Bank loan, it is worth signing up for a Nectar card in advance, either by getting a registration form in store or by applying online.

How much can I borrow with Sainsbury's Bank?

If you are a Nectar member, you can borrow up to £40,000 over between 1-7 years. However, if you borrow the maximum amount over the full 7 years, it pushes the APR up to 6.2%, compared to 3.4% if you were to borrow £10,000 over the same period. For non-Nectar members, the maximum loan amount is £25,000, which is also repayable over 1-7 years.

As a rule of thumb, it is always better to borrow the minimum amount possible and pay it back over the shortest period of time as you will end up paying back far less in interest and, therefore, make the loan cheaper.

How much does a Sainsbury's loan cost?

The interest rate you pay on your Sainsbury's Loan will depend on the amount you are borrowing and the loan term, as well as whether you are a Nectar member. For instance, if you are a Nectar member and borrow £30,000 over 5 years, the representative APR is 5.7%, while if you borrowed £20,000 over the same period, the APR is 3.4%. For a non-Nectar member, the APR for most loans is 3.5%, although it goes up to 9.9% if you are borrowing less than £5,000.

The representative example Sainsbury's Bank gives is that borrowing £10,000 over 60 months at 3.4% APR would mean you would pay 60 monthly repayments of £181.24. The total amount you would repay is £10,874.40, of which £874.40 is interest.

Am I eligible for a Sainsbury's loan?

Before assessing your creditworthiness and the affordability of a potential loan, Sainsbury's Bank will check if you meet its basic lending criteria. To be eligible for a Sainsbury's loan, you must:

  • Be between the ages of 18-80 years old. You should be under 83 when the loan is due to be repaid.
  • Have a permanent UK address
  • Be in permanent paid employment or retired, with a gross annual income of over £7,500
  • Have a UK bank or building society account that accepts Direct Debits
  • Not have a history of County Court Judgments or bankruptcy

In addition, you need to have either a "good" or "excellent" credit rating with the three main credit reference agencies, Experian, Equifax and TransUnion.

Should I take out a Sainsbury's Bank loan?

Sainsbury's Bank loans are competitively priced and you also get a further discount if you are a Nectar member, which makes them more appealing. You will, however, need to have a good credit history to qualify for a loan with Sainsbury's Bank and it is important to thoroughly check the eligibility criteria before making a loan application so you don't risk harming your credit rating further if you are turned down.

How do I apply for a Sainsbury's loan?

Unlike many lenders, Sainsbury's Bank doesn't have a "soft search" eligibility checker, so you need to be confident you are likely to be approved before completing the application as, if you are declined, it is likely to harm your credit rating and be visible to other lenders on your credit report. For this reason, you also need to make sure the information you give is as accurate as possible.

When completing your application online, you will need to have the following information available:

  • Your address or addresses for the past 3 years
  • Your bank sort code and account number
  • Your monthly incomings and outgoings
  • Your employer's name and address, or details of your pension if retired
  • Your Nectar card number, if you are a Nectar member

Sainsbury's Bank will use this information, as well as running a credit check across your credit files, to assess whether you are eligible for a loan and if the amount you would have to pay back is affordable based on your individual circumstances. You may be requested to provide additional information or documentation to support your application.

If your loan is approved, which you generally find out immediately, you will be sent a loan agreement, which you can sign digitally. Alternatively, you can request a paper version of the loan agreement, which should be returned by post.

How long does Sainsbury's take to pay out a loan?

If you have completed your application online, have been approved and sign the loan agreement digitally, you could receive the loan money into your account within 2 hours, or on the next working day. If, however, you are required to supply documents to support your application or sign a paper copy of the loan agreement, it can take up to 5 working days to review, approve and issue your loan.

Can I repay my Sainsbury's Bank loan early?

There are two options available if you want to pay off your loan early: make overpayments or additional payments in order to reduce the term of the loan, or pay off the balance in full. If you opt to make an overpayment, you will need to contact Sainsbury's Bank to let them know. Depending on how much you want to overpay, there may be a fee of a certain percentage of the interest but, because you will ultimately save money over the long term by overpaying, it often still works out cheaper.

Similarly, if you want to repay the loan in full, Sainsbury's Bank has the right to charge you up to 2 months interest, although this will vary depending on how long you have remaining on the mortgage term and what the outstanding balance is. In order to pay off the loan, you need to request a settlement figure from the bank, which will detail the balance and any associated fees.

Sainsbury's Bank loans pros and cons

Here is a summary of the key pros and cons of applying for a Sainsbury's Bank loan:

Pros of Sainsbury's Bank loans

  • Unsecured personal loans of up to £40,000, which is a relatively high amount compared with other lenders
  • Preferential terms and conditions if you are a Nectar member
  • Usually an instant decision and receive funds into your account in as little as 2 hours
  • Capacity to have more than one loan from Sainsbury's Bank simultaneously, subject to status

Cons of Sainsbury's Bank loans

  • Although there is a loan calculator, there isn't a dedicated soft-search function, which means you need to check the eligibility criteria carefully before applying
  • You may have to pay additional fees if you want to repay the loan early
  • If you haven't got a Nectar card, you won't be able to secure the best rate

Sainsbury's Bank customer reviews

According to independent customer review site Trustpliot, Sainsbury's Bank is an "average" company, scoring 3.5 out of 5.0 stars based on around 7,500 reviews. Of those, 56% classified the bank as "excellent", while a further 22% deemed it to be "bad". It is worth noting, however, that the reviews are not specific to loans and, indeed, many of the reviews refer specifically to people's experiences of Sainsbury's Bank insurance policies. Overall, customer service was both praised and criticised across different respondents.