M&S slashes personal loan rates as battle of the supermarket lenders heats up

Marks & Spencer has become the latest in a long line of lenders to slash its personal loan rates.

M&S Money has cut the rate on its mid-value personal loans from 12.9 per cent to 7.3 per cent APR. The offer applies to new personal loans between £5,000 and £7,499 over 12 to 60 months. 

This huge cut makes M&S the market-leader for loans of this size, but there are several others hot on its heels as the battle for the best buy heats up.

Rates slashed: M&S money cuts rates on its personal loans as the battle of the supermarket banks heats up

Rates slashed: M&S; money cuts rates on its personal loans as the battle of the supermarket banks heats up

This follows M&S Money’s earlier rate reduction on loans between £7,500 and £15,000 from 6.4 per cent to 6 per cent.


While the cut is large M&S Money is only just ahead of a number of other lenders who have all also recently cut their rates. Sainsbury’s Bank offers similar sized loans for 7.5 per cent, Derbyshire building society offers 7.6 per cent, while Clydsedale Bank and Tesco Bank offer 7.8 per cent.

With far fewer lenders now than there were four years ago - just 26 compared to 43 back in 2008 - the battle for the best rates is tight.


For a £5,000 loan over three years. Data from Moneyfacts.co.uk

ProviderAPR (representative)Monthly repaymentTotal repayable
M&S Money7.3 per cent£154.53  £5,563.08  
Sainbury's Bank7.5 per cent £154.97£5,578.92
Derbyshire Building Society 7.6 per cent £155.18£5,586.48
Clydesdale Bank 7.8 per cent£155.61£5,601.96
Tesco Bank 7.8 per cent£156.59£5,637.24

Rachel Springall of Moneyfacts said: ‘The last time Moneyfacts recorded a rate of 7.3 per cent for a £5,000 loan over a three year period was in 2008.'

'While there have been several loan rate reductions over the last few months, this is unlikely to be the end of the price war. Lenders will continue to compete to be the lowest loan rate provider and the supermarket lenders will want to come out on top.’

Springall continued: ‘As more customers get on board with the supermarket lenders, it is likely we will see more competitive rates across a range of different products’.

She warned customers to remember that going to their existing bank may not be the way to get the best loan rate, and that not everyone will qualify for the lowest loan rates.

Rules allows lender to only offer the advertised APRs to 51 per cent of customers accepted – those with the best credit ratings.