A Sainsbury’s bank loan could help you purchase a car ranging anywhere from £1,000 to £40,000, or potentially more if you’re combining this with some of your own savings.
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There are various different ways you can finance the purchase of a car. Each option will almost certainly require you to commit to monthly payments, so make sure you carefully work out your budget and choose an affordable option. Don’t forget to take into consideration other costs you’ll need to pay out, such as road tax, insurance and MOT, before making your final decision. Late repayments will damage your credit score, making it harder to source finance in the future.
Learn more about the different ways you can finance a new or used car purchase.
One advantage of buying a car with a personal loan (over a leasing option) is that you’ll own the vehicle outright from day one. Another advantage is that you won’t need to put down a deposit (although if you can finance some of the purchase from your own pocket, you’ll save money in interest).
If you choose to finance your vehicle purchase with a personal loan from Sainsbury’s bank, and you think you’ll want a financial breather after you’ve bought your new wheels, then Sainsbury’s offers the option of a two-month repayment holiday at the start of the loan. This can be really handy at a time when you’ve probably also had to fork out for insurance and road tax, but remember: if you opt to take a repayment holiday, then your loan will still accrue interest during this period – it’ll cost you more overall, and you’ll be paying the loan off for a little longer.
Sainsbury’s also offers a price guarantee on their loans, so if you’re offered a ‘like for like’ car loan with a lower APR let them know!
Key features at a glance
These loans are unsecured – meaning they’re be based on creditworthiness, rather than the use of property or other assets as collateral. Here are some of the key features at a glance:
- Borrow from £1,000-£40,000.
- Borrow over 1-7 years
- Own the vehicle outright from day one. You’re not leasing the car from a third party.
- No deposit. Because you’re buying the car outright, there’s no deposit involved. However, if you can put up some of the cost yourself, and borrow less, you’ll pay less in interest.
- Freedom to purchase from any vendor. With some car finance solutions, you can be restricted to purchasing from certain sellers. Not so with a personal loan.
- Fixed monthly repayments. Because the interest rate is fixed, you’ll pay the same amount each month and you’ll know upfront how much the loan is going to cost overall.
- Improved rates for Nectar card holders.
- Quick access to funds. If your application has been completed and accepted online, your loan should be transferred immediately.
- Price match. Sainsbury’s will beat a ‘like for like’ car loan APR from another provider.
- Early repayments. Pay back your some or all of your loan early at any time.
- Option to defer repayments for two months. Defer your repayments for the first two months so you can get your finances in shape before you start paying back. Bear in mind your loan will still accrue interest during this time, so it would cost more overall.
How it works
- Establish your budget. Use Sainsbury’s online calculator to work out what you can afford.
- Apply online. Without the need for paper documents.
- Await your decision. Sainsbury’s will assess your application by running affordability and credit checks.
- Receive your loan. Once accepted your loan should be transferred immediately.
- Purchase the vehicle.
How much will I pay?
The cost of your car finance will depend on factors like how much finance you want, how long you want it for and your credit score.
- Loan size. The amount you borrow will affect the interest rate you pay.
- Long term finance. Generally speaking, if you choose a longer repayment period, you’ll pay less each month but more in total.
- Short term finance. Generally speaking, paying back your finance over a shorter period will mean you pay more each month, but less in total.
- Credit rating. A better credit score will mean you have to pay less in interest.
- Nectar card. If you have a Nectar card make sure you enter this during your application. This will allow you to qualify for lower rates and help Sainsbury’s asses your application.
If you’re comparing any credit-based products, it won’t be long before you’ll come across the Annual Percentage Rate (APR). This figure is designed to provide an annual summary of the cost of a loan. It takes into account both interest and any mandatory charges to be paid (for example an arrangement fee) over the duration of a loan.
All lenders must calculate the APR of their products in the same way and must tell you the APR before you sign an agreement, so for consumers it can be a handy tool for comparison, alongside other features such as the total amount payable.
Bear in mind, however, that lenders are only obliged to award this rate to 51% of those who take out the loan – the other 49% could pay more. That’s why it’s often referred to as the representative APR.
What criteria must I meet?
Sainsbury’s do their best to help anyone that can afford to finance a car. However you will need to meet the following criteria:
- Age. Be aged between 18 and 76 years old.
- Address. You’ll need to provide 3 years of address details.
- Income. You must have a regular income. Benefits are not considered an acceptable source of income.
- Employment. You must have been employed by your current employer for over 3 months.
- Credit history. You must not have been declared bankrupt in the last 6 years.
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