Tesco Loans: An In-Depth Guide


Tesco Bank offers personal loans to help customers finance larger purchases or consolidate higher-interest debts into one affordable monthly payment. As one of the largest retailers and grocery chains in the world, Tesco has expanded into various financial services over the years, including credit cards, savings accounts, and insurance. Their personal loan products aim to provide convenient and affordable borrowing options for Tesco customers.

Tesco Loan Products

Personal Loans

Tesco’s primary loan product is an unsecured personal loan, meaning no collateral is required. Personal loans can be used for any purpose, such as home improvements, debt consolidation, vacations, or emergencies. Loan amounts range from £1,000 to £25,000, with repayment terms from 1 to 5 years. Interest rates are either fixed for the term or discounted for the first 6-18 months, then switch to a higher variable rate. Minimum income requirements apply based on your requested loan amount.



For instance, if you borrow £7,500 at a 2-year fixed rate of 5.9% APR, your monthly repayments would be £334 over 24 months. The total amount repayable would be £8,016, resulting in £516 of interest charged over the loan term.

0% Balance Transfer Cards

Tesco also offers 0% balance transfer credit cards, allowing customers to consolidate existing credit card debts from other providers interest-free for a set period, usually around 20 months. A cash withdrawal or purchase APR of around 20-25% applies after the introductory 0% rate ends. Balance transfer fees of around 3% of the amount transferred are charged.



If you transfer a £3,000 balance to a Tesco 0% card with a 3% fee (£90), your monthly payments over 20 months at 0% interest would be around £150 to clear the debt. Compared to paying 20% interest elsewhere, this could save hundreds in interest charges.

Eligibility Requirements

To qualify for a Tesco loan, borrowers generally need to:

  • Be at least 18 years old
  • Be a UK resident
  • Have a stable income source through employment or pensions
  • Not have any County Court Judgments (CCJs) or visible defaults on credit reports
  • Pass a credit check and affordability assessment

Income requirements vary depending on the loan amount. For loans up to £7,500, a minimum income of £12,000 per year is usually required. Income needs to be at least £15,000 for loans between £7,501-£15,000 and £18,000 for £15,001-£25,000 loans. Pension and benefit income can be considered.

Proof of address and income through recent pay slips, P60 or bank statements will be needed with the application. Joint applications are allowed where both applicants meet the individual eligibility criteria.


Interest Rates and Fees

Interest Rates

As mentioned earlier, Tesco personal loans offer either a fixed rate for the full term or a discounted variable rate that increases after 6-18 months. Specific interest rates depend on individual credit profiles and loan amounts/terms.

Below are some sample interest rates as of writing:

  • £7,500 loan over two years: 5.9% APR fixed
  • £15,000 loan over three years: 7.4% APR fixed for 18 months, then 7.9% variable
  • £5,000 loan over one year: 9.9% APR discounted to 6.9% for 6 months, then 9.9% variable

Always check current rates and compare offers from other lenders, too, before committing. Tesco loans become more expensive for bigger loan amounts or longer repayment periods.


There are no arrangements or early repayment fees on Tesco personal loans. The only upfront cost is a £10 non-refundable application fee. Customers are free to make overpayments or settle the full balance early with no penalties. This flexibility makes Tesco loans more affordable if circumstances change.

Application Process

Here are the basic steps to apply for a Tesco loan:

  • Check eligibility and estimate affordability using Tesco’s online calculator.
  • Fill out an online application form providing personal and financial details. The process takes 5-10 minutes.
  • Submit requested income/identity verification docs like recent payslips or bank statements.
  • Credit checks are run, and affordability is evaluated to assess risk. This has no impact on credit scores.
  • An instant decision is provided in most cases. If approved, loan terms are presented for acceptance.
  • Funds are deposited in 1-3 working days upon signed acceptance. This ensures swift access to funds.
  • Start making monthly repayments by direct debit as agreed until the loan is repaid in full.
  • Build your credit history and potentially access better rates on future loans.

The entire application can be dealt with online or over the phone. A quick turnaround allows customers to access finances when needed most.

Tips for Approval

To boost your chances of approval, consider the below:

  • Check for eligibility faults using a “soft credit search” before fully applying.
  • Maintain up-to-date credit accounts that are in good standing with no missed payments.
  • Provide income proof like recent pay slips or bank statements showing regular deposits.
  • Explain any past credit issues like defaults in the “Additional Information” section.
  • Ask for a lower loan amount if usage and credit history are not very strong.
  • Apply jointly with another applicant if dual incomes help affordability.
  • Use a balance transfer card first to show responsible credit management over 6-12 months before seeking a personal loan.

Taking the time to assess viability and improving relevant factors can help secure the best loan offer at Tesco or elsewhere. Always compare multiple lenders too.

Real-Life Examples

To further illustrate Tesco loan concepts, here are some hypothetical scenarios:

  • John earns £21,000 and needs £7,000 to consolidate old debts. He qualifies for a 2-year loan fixed at 5.9% APR, with monthly payments of £327 using direct debit.
  • Jane and her partner together earn £32,000 annually. They apply jointly for a £15,000 loan over three years at a 7.4% fixed rate to fund home improvements. Their repayments are £460 per month.
  • Sam recently switched jobs and is now earning £18,500. His credit history has one missed payment 6 years ago. Tesco offers him a £5,000 loan over 12 months at a discounted 8.9% rate for the first 6 months, then at 11.9% variable. His monthly direct debit is £435.

Frequently Asked Questions

Can Tesco personal loans be used for any purpose?

Yes, Tesco loans have no restrictions on usage. Borrowers can use the funds for debt consolidation, home renovations, vacations, emergencies or anything else. The lender does not monitor or limit spending of loaned amounts.

Is a Tesco loan better than other providers?

Tesco offers competitive interest rates and no fees, but they may not always be the most affordable option. Rates vary based on individual credit profiles. It’s best to compare at least three providers using an eligibility checker to find the lowest annual percentage rate (APR). Factors like application requirements and customer service also differ between lenders.

How quickly can I access loan funds?

Most Tesco loan applications are processed within a day, and funds are deposited within 1-3 working days of signing loan documents, allowing swift access to finances. In rare cases, additional verification may delay disbursement by up to a week. Borrowers can opt to receive the money straight into their bank account.

Can I make overpayments or repay early without penalty?

Yes, Tesco personal loans have no restrictions or fees for lump sum overpayments or lump sum early settlements. Borrowers are free to repay more than the minimum payment each month or settle the full balance at any time, thereby reducing interest costs over the life of the loan.

What happens if I miss a repayment?

Missing a monthly payment will be reported to the credit bureaus and negatively impact credit scores. Tesco may also charge late payment fees. If repayments remain overdue for a prolonged period, the entire outstanding balance may become due immediately, and legal action may be taken to recover funds through a County Court Judgment (CCJ). It’s best to contact Tesco as soon as possible about any potential payment issues.


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