Tesco Loans For Debt Consolidation
Good:
You may be able to cut your repayments to other creditors in half by taking out this loan
Bad:
Tesco may quote you one APR initially and then change it on the loan agreement - be aware
Verdict:
Bring together all of your debts with this loan and reduce your monthly payments - even if you are provisionally accepted, you may get turned down a couple of days later
Offering loans from £7,500 to £14,999 to help customers who are struggling with multiple creditors or high monthly repayments. The idea behind the consolidation loan is to try and help customers get on top of their finances, with this in mind Tesco offer a 2 month payment break at the start of the loan which can really help.
Tesco offer two methods of applying for their loans, the most efficient way is using their online application service. However if you would rather talk to someone about it you can call their UK based call centres. Once you have applied and completed the online application form, they will give you an instant provisional decision. If you are provisionally accepted, they will further assess your application and post your loan agreement out. You may have to send extra documentation to back your application up such as bank statements or wage slips. Return the documents back to Tesco and it can take up to 3 working days to make a final decision on your loan. They will then send you a letter to confirm everything and the funds will be in your account in 3 working days.
This can be a good option if you have debts with high interest accounts such as catalogues, credit cards or loans. Many Tesco customers manage to cut their monthly outgoings and lower the overall interest they are paying. However bear in mind Tesco do not accept any customers with Defaults or CCJs. There does seem to be an issue regarding customer service with documents and agreements seemingly going missing. Internal communication seems to be on the shaky side judging from customer reviews on the internet. However, the people that have received their loans have on the whole said they are very happy with the service. Make sure you make your repayments on time as the late payment charges are a bit more expensive than other lenders.
Loan Calculator (Representative 6.4%APR)
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The original application I made to Tesco was for £15,000 over 10 years for a personal loan. They quoted me the APR of 8.0%. I then told them it was for debt consolidation so they re-calculated the loan and the rate came out as 11.3%. I was very shocked to say the least. Didn't take the loan.
All I can say is that if you are looking to consolidate existing loans, Tesco is definitely one of the ones to consider. The APR is low , the customer service is excellent and you will get a principal agreement there and then. They send you the paperwork within a few days which you need to check and sign. I had to send them a recent payslip, 3 months bank statements and a utility bill, which they send directly back to you.
The initial rate I was quoted was 7.4% and we received our paperwork 5 days later... only to find that the APR had jumped up to 9%! This made it £80 dearer a month. We complained we'd been mislead and they said it states rates may vary on application. We stated we couldn't afford the monthly repayments under the new terms. I'm very disappointed as they put us through a lot of needless inconvenience.
Loans up to £14,999 - 10 years
Non-express - up to 10 working days
- You must be between the ages of 22 and 74
- You need: bank details, details of your regular monthly income after tax, your credit and store card limits, current balances and time held, details of your other monthly outgoing expenses, 3 years address details and your current employers details
- You must have been living in the UK for one year or longer and have a permanent address
- You must have a good credit history
- You must have a bank/building society account with Direct Debit facilities
- You must be in full-time, part-time or self-employment earning over £10,000 per year
- Default notice - £30.00
- Courier fee to receive your documents quicker - £50.00
- Payment received late - £30.00
- Two month's additional interest
