Personal Lending

Consumer lending is a relatively new service provided by the Tesco company. Among with insurances, credit cards, mortgages and savings, Tesco started to provide the so called Tesco loans. Tesco loans are another option on the highly competitive UK loan market, where a lot of lenders compete with each other offering loans with different parameters. So Tesco loans have their advantages that make them suitable for certain people. It all depends on what exactly you want from your loan. Along with the convenience of borrowing at your local supermarket, Tesco loans provide a very attractive interest rate. The standard rate associated with Tesco loans is one of the lowest around, but it should be noticed that this lower rate is only available for loans over 7000?. Loans of less than this amount will be subject to a higher rate, so it is certainly worth shopping around if you're thinking of taking out a small loan.

Tesco loans are available for sums up to ?25,000, but the acceptance of your application greatly depends on your credit score. When you apply for a Tesco loan you provide your name and all personal address details, then this information is used to verify your credit score. Credit scoring is an assessment of your ability to repay based on the information you have provided in your application, along with the details from the credit reference agency.

One of the good things about Tesco loans is that you don't have to start repaying them immediately. Tesco gives you the option to take a two month repayment break before commencing your monthly payments. This is only available at the start of the loan and gives you 3 payment free months from the time your funds are issued until your first repayment is taken by Direct Debit. This means that you will not have to start making your repayments for three months from the day you receive your loan amount. This might seem an attractive prospect, but you will save money by starting to repay your debt straight away - while you're avoiding your repayments, the interest will start mounting up. With Tesco loans you can choose your preferred payment date.

If Tesco approves you for a loan then the funds should be available in your chosen bank/building society account within 3 working days of you receiving written confirmation from Tesco that your loan has been accepted. An electronic payment is sent direct to your bank account and the money can be withdrawn as soon as the funds reach your account.

All in all, the Tesco loans are not a bad prospect - you could do much worse. But you could also do a lot better, especially if you want to borrow a small amount for a major purchase or to pay off existing debts. All you need to do is spend some time to search around and compare them with other lenders. Also, it is unlikely that you will be accepted for a Tesco loan if you have had debt problems in the past.