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Tesco Bank personal loans: At a glance
Tesco Bank personal loans offer longer-than-usual repayment periods and the chance to delay making your first loan repayment for two months. Keep in mind however, that using this option will increase the overall cost of the loan. Customer reviews are positive and Clubcard holders could get reduced rates, but if you want the largest possible loan or have bad credit, you may want to look elsewhere.
If you’re considering a loan, it’s sensible to only borrow what you need and pay it back as quickly as possible based on what you can comfortably afford to repay each month.
Promotion
Tesco Bank Personal Loan
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Representative APR5.6%Non-Clubcard rate shown – Clubcard members receive preferential rate
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Representative ExampleRepresentative APR 5.6%. Based on a loan of £10,000 over 60 months at a Fixed Annual Interest Rate of 5.0800% (nominal). Monthly repayments of £190.83. Total amount payable £11,449.80. Maximum APR: 34.5%.
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Available amounts£1,000 to £35,000
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Available Terms1 to 10 years
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Joint LoansYes
- Must be a UK resident
- Must be aged 18 or over
Learn more about how we bring you our review.
Tesco Bank loans pros & cons
Pros
- You can defer your repayment start date and choose the date that your monthly payments are taken.
- Joint loans are available.
- You could get an instant decision when applying online.
- There are multiple ways to contact Tesco Bank for help and support.
- Tesco Clubcard holders could get preferential rates.
Cons
- There are interest charges if you pay your loan off early.
The pros and cons featured here are chosen by us based on a combination of our expert opinions from our research of the personal loans market and an exclusive survey of UK consumers conducted on behalf of NerdWallet UK in February 2023 to identify the features of personal loans that people feel are most important. They are unlikely to be the only product features and restrictions that you should consider. Pros and Cons are subjective and you should align them to your own personal circumstances. Information was correct at the time of publication but may have changed since.
Tesco Bank loan overview
Established in 1997, and under full ownership of Tesco PLC since 2008, Tesco Bank offers a number of financial products and services, including personal unsecured loans, credit cards, car insurance and savings accounts.
Tesco Bank offers unsecured personal loans to individual borrowers and those looking to take out a joint loan. Importantly, you don’t need to be an existing customer of the bank to apply.
It’s possible to take out a Tesco Bank personal loan of between £1,000 and £35,000, while the length of time you’re allowed to repay the loan can be as short as one year and potentially as long as 10 years, depending on the loan amount and how the funds will be used.
| Loan amounts | £1,000 to £35,000 |
| Term length | One to 10 years |
| Time to receive funds after approval | Two to 48 hours |
| Need to have an account with the provider? | No |
| Customer support | Phone, mobile app, social media |
| Trustpilot rating | 4 stars (20 April 2023) |
Where Tesco Bank personal loans stand out
Long repayment periods:
Tesco Bank offers loans that can be repaid over a period of up to 10 years if you’re borrowing between £10,000 and £25,000. By contrast, the longest repayment term many other lenders offer is just seven or even five years. Repaying a loan over a longer period can lower monthly repayments, though you will end up paying more in interest overall.
Quick approval decision:
Tesco says that if you apply for its personal loan online, it is possible to get an instant decision regarding whether your application has been successful, declined, or if you need to provide more information. To give yourself the best chance of a quick decision, try to have as much information to hand as you can when you’re about to apply.
It offers joint loans:
Tesco Bank allows applications for joint loans, whereas not every lender does. Taking out a joint loan with someone else could improve your chances of approval if they have a higher income or better credit score, and lets you share the cost of the loan.
You can delay the start of your repayments:
With a Tesco Bank loan, eligible borrowers can delay making their first repayment for two months. The way it works means you’ll end up paying more interest overall, but it’s a useful option if you’re not in a position to start paying back your loan straight away.
Where Tesco Bank personal loans fall short
Low maximum loan amounts:
The most you can borrow through a Tesco personal loan is £35,000. It’s not the lowest maximum amount among lenders – some cap the amount that can be borrowed at £25,000 – but if you need an even larger loan, it’s possible to borrow up to £50,000 elsewhere.
No bad credit loans:
Tesco Bank doesn’t say that you need a good credit score to apply for a loan, so if your credit isn’t entirely up to scratch it might still be possible to get offered a loan. However, if your credit situation is closer to bad than fair, it is worth noting that Tesco makes it clear that it doesn’t offer dedicated bad credit loans.
What types of loan does Tesco Bank offer?
Unsecured loans
The personal loans available from Tesco Bank are unsecured loans, which can be taken out without having to put forward an asset that you own as security, or collateral, against the loan. The amount borrowed, plus interest, is then paid back in fixed monthly repayments made over a set period of time, called the loan term.
The interest rate you’re offered will depend on your personal circumstances and the amount you wish to borrow. It’s also worth noting that if you’re a Tesco Clubcard holder when you apply, Tesco might offer you a lower rate.
Helpfully, there’s an easy-to-use loan calculator on the bank’s website which will provide an indication of how much the monthly repayments and total amount repayable might be on a typical Tesco personal loan at different loan amounts and over various terms.
Tesco Bank loans can be used for a wide variety of reasons, including to fund home improvements, buy a car, pay for a wedding or holiday, and consolidate existing debt.
» MORE: Try our personal loan calculator
Joint loans
Tesco Bank offers joint loans if you’re looking to borrow with a partner, relative or friend. Tesco joint loans are available for between £1,000 and £35,000 and potentially repayable over a period of between one and 10 years, depending on the amount borrowed and the reason for taking the loan.
Remember, if you take out a joint loan with someone, your credit files will be linked and you’ll both be jointly responsible for paying back the loan. Any missed payments will affect both of your credit scores.
Loans for bad credit
Having little in the way of credit history or a bad credit score is likely to make it harder to get a Tesco loan. While Tesco doesn’t specify a particular credit score that will rule you in or out of qualifying for one of its loans, it makes clear that it does not offer bad credit loans, which are typically aimed at those with a poor credit history.
Don’t apply for loans you are unlikely to get because unsuccessful applications will have a negative effect on your credit score.
Tesco Bank eligibility criteria
To qualify for a Tesco loan, you will need to:
- be between 18 and 74 years old (or at least age 22 if the loan is to refinance existing debt)
- be employed and not in a probationary period or have a separate regular income, such as a pension
- have lived in the UK for at least three years
- have a UK personal current account.
You will also need to pass any credit checks that Tesco carries out as part of the application process.
You can check your eligibility for a Tesco Bank personal loan in a matter of minutes and without affecting your credit score on the bank’s website. A credit check will only be made if you decide to apply for a loan.
Alternatively, you could consider using a loans eligibility service to conduct a soft search across multiple lenders. This will show you the likelihood of a successful application against several different loans, without affecting your credit score. But check the details of the service you use, to make sure it only uses soft searches and how many lenders it checks.
» MORE: Am I eligible to get a personal loan?
Tesco Bank loan features reviews
Making payments
When it comes to taking control of repayments, a Tesco Bank personal loan offers a number of useful features to borrowers.
One flexible option that is not offered by every lender, but is with Tesco, is the ability to select the date that your monthly direct debit payments are taken when setting up a loan. Again, keep in mind that this could alter the amount of interest you are charged.
In addition, if you are eligible, it may be possible to delay making your first loan repayment to Tesco for up to two months. Interest is charged during this period and two months will be added to the end of your loan term, which means you’ll pay more interest overall, but it’s an option which could provide some useful breathing space ahead of starting to pay back your loan.
Making overpayments
Tesco allows borrowers to make penalty-free overpayments at any time, giving you the chance to reduce the period of time you’re paying back the loan, which could save you interest overall. Alternatively, you can overpay and ask Tesco to reduce your monthly payments going forward.
Additional payments can be made by bank transfer, through your Tesco online loan payment portal, via standing order or by cheque, so there should be an option to suit everyone. Some lenders have limits on how much you can overpay so always check the terms before doing so.
Paying off a loan early
A Tesco Bank personal loan can be paid off in full at any time during the loan term. Crucially, a charge equivalent to two months’ interest will need to be paid to do so, but, even with this, it might mean you end up paying less interest in total than you would have done.
Additional borrowing
It is possible to apply to borrow more from Tesco Bank but only after you’ve made eight monthly repayments in a row on the loan you already have.
Additional loans can be for between £1,000 and £35,000, but the most you can borrow in total is £35,000, taking into account the amount left outstanding on your current loan.
There are two routes to borrowing more: by topping up your existing loan, which involves combining your existing and new borrowing into a new loan with a new rate and terms, or by taking out a separate second loan to sit alongside your current loan.
The second loan option might be worth exploring if you have a low interest rate on your existing loan that you don’t want to lose. Unfortunately, however, it isn’t possible to take a second loan as a joint loan.
Any additional borrowing is likely to be assessed using your circumstances at that time rather than the details you initially provided.
Customer support
Tesco Bank provides a number of ways for personal loan customers to get in touch, including through its online banking service, via mobile app and through various social media channels.
If you prefer more traditional methods of customer support, Tesco also provides phone support which is available seven days a week or you can write to the bank.
Customer ratings
Tesco Bank receives broadly positive customer reviews on Trustpilot, with a rating of four out of five across more than 10,000 reviews – impressive when compared to the relatively low ratings received by the major banks. While this rating relates to its offering as a whole and not just its personal loans, there is notable praise in relation to the bank’s customer service.
The Fairer Finance ratings are encouraging too, with Tesco Bank receiving a score of 70% for its customer experience, placing it joint second among its peers in the rankings.
This information was correct as of 20 April 2023.
How can I apply for a Tesco Bank personal loan?
It’s possible to apply for a Tesco Bank loan either online or over the phone.
If you apply online and get approval, you’ll either be sent a credit agreement through the post to sign and return or you might be able to sign a digital credit agreement. Once this has been completed, you can expect to receive the funds into your account within 48 hours via Faster Payments. If you’re approved and sign digitally, it might take as little as two hours to get your funds.
If you apply over the phone or are asked by Tesco for further documents, you’ll be sent a credit agreement by post along with details of the extra information you need to supply. Tesco says it could take between five and 10 days for it to work through and verify the documentation you return but if it’s approved, your funds will also be paid by Faster Payments.
If Tesco makes you a loan offer, you will have 30 days from the date you made the application to return the necessary documents, otherwise the offer will expire.
What information do I need?
Before sitting down to apply for a Tesco personal loan, it’s best to have to hand the following details:
- your bank account
- your regular income after tax each month
- your employer’s address (if you’re employed)
- the limits on any credit and store cards you might have and their current balances
- your regular monthly outgoings
- your address details for the past three years
» MORE: How to get a personal loan
How long does it take to apply?
When applying online, there’s the chance of instant approval and to receive your funds within two hours, which means you might get a Tesco loan faster than through many other lenders. However, this is not a cast-iron promise and you should be aware that the Faster Payment delivery of funds used by Tesco can sometimes take up to 48 hours.
If you apply over the phone, or the bank needs you to supply some extra documents before making a loan decision, you might be looking at between five and 10 days to move an application forward and get the money.
Frequently asked questions
You’re likely to stand a better chance of getting a Tesco Bank personal loan if you have good credit, although other factors such as your earnings and employment will also be important in determining if you’re offered a loan. It’s also worth noting that Tesco Bank does not offer specific bad credit loans.
Applying for a Tesco Bank loan has the potential to affect your credit score, but simply checking your eligibility for a loan will not. If you already have a loan, your credit score could be negatively impacted if you fail to make repayments when you should.
Review methodology
At NerdWallet Ltd UK we base our reviews on the results of surveys we conduct to understand what key product features are important to those who use them, and align them to the product we review.
Product details reflect the information that was available at that time but may have changed since. We strive to give you a review on as many products as possible but it is likely there are others available that we have not reviewed. The review is our opinion, but it does not constitute advice, recommendation or suitability of your financial circumstances.
You can view our review methodology here.
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