Tesco Bank has launched a new range of simplified personal loans offering what it says are some of the most competitive rates on the market.

Customers borrowing between £5,000 and £9,999 will be charged 3.3% APR for loan terms of one to seven years.

Those borrowing between £10,000 and £25,000 will pay 3.1% APR over one to seven years.

The loans are available to both Clubcard and non-Clubcard customers and there are no set-up charges.

David McCreadie, managing director at Tesco Bank, said: “We know that for some customers a personal loan is the most cost efficient approach to managing their money or to finance a car or home improvement.

“Our new range of personal loan products offer customers some of the most competitive rates on the market and I’m delighted that they are available to apply for from today.”

Figures released by the Bank of England last month showed that the rapid growth of consumer credit – borrowing on credit cards, bank loans and car finance – had eased off.

Borrowing rose 9.8% in July but this was lower than in June and represented the slowest growth rate since April 2016.

For some customers a personal loan is the most cost efficient approach to managing their money

David McCreadie, managing director, Tesco Bank,
Atom 284 lives here

Responding to the Bank’s figures, Peter Tutton, head of Policy at StepChange Debt Charity, said: “With stagnant wages and rising inflation squeezing household incomes further, a slight decrease in the rate of growth for consumer credit is no sign of relief.

“These latest figures show overall consumer credit is rising by nearly 10% annually and with people now getting into debt at a younger age and an estimated 8.8m turning to credit to meet essential living costs, we must remain vigilant that a credit bubble is not history repeating.

“As the gap between living costs and wages risks getting wider, the Financial Conduct Authority must tackle irresponsible and bad lending practices which can land people into problem debt and financial difficulty.

“With the issue of affordability now on regulator’s agenda, it’s now a crucial time to ensure lenders are acting sustainably and responsibly, carrying out robust affordability checks and intervening quickly to help people struggling.”