Tesco Loans

Find out more about the personal loans offered by Tesco Loans, including how they work and how much you could potentially borrow.

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CONNOR CAMPBELL

LEAD WRITER

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.

Tesco personal loans

Tesco personal loans are unsecured, meaning you do not need to provide an asset as a security, and come with a fixed interest rate for the lifetime of the loan.

As for the length of the loan, Tesco offers loans from 12 months all the way up to 10 years. The maximum available length of your term will be informed by the amount you are planning to borrow.

How much can I borrow?

With a Tesco personal loan, you can borrow between £1,000 and £35,000. How much you borrow, and your personal financial circumstances, will affect how much your loan costs overall.

What are the interest rates on a Tesco loan?

The interest rate on your Tesco loan will be fixed for the entirety of the repayment period.

What interest rate you are offered at the start of your loan will depend on how much you borrow, how long you are borrowing for, and your own financial situation.

Can I get a joint loan from Tesco?

It is possible to apply for a joint loan through Tesco. As with a standard personal loan, you can borrow between £1,000 and £35,000, for a maximum of 10 years.

Before applying for a joint Tesco loan, you should make sure you have had an honest conversation about your joint finances with the person who you will be partnering with, as both parties will be liable to repay the loan.

Can I get a secured loan from Tesco?

At the time of writing, Tesco does not offer a secured loan. Unlike an unsecured loan, a secured loan would require you to put up an asset of value, such as your home, as a security in order to be eligible for the loan.

» COMPARE: Secured loans

Pros and cons of Tesco loans

Tesco loans have a number of advantages and disadvantages.

Pros

  • You can get an instant decision when applying online.
  • You may be able to apply for a two-month payment break at the beginning of your loan term.
  • You can make additional payments to your loan with no extra charges.
  • You can apply for a joint loan.

Cons

  • Tesco does not offer secured loans.
  • You will be charged an early repayment fee if you pay off your loan early.

How do Tesco loans work?

Once you have filled out your application with Tesco, the lender will assess your suitability, and carry out a credit check.

Tesco will then either reject your application or make you an offer, which you are free to accept or decline. This offer will be valid for 30 days from your application date. If you accept, you may receive your funds within 48 hours of the approval.

You will then start to make your monthly repayments, with interest, on your chosen date, until the loan is completely paid off. However, if you are eligible, Tesco loans do have the option of a two-month break at the beginning of your loan, in order to delay your repayments. This means your first repayment would occur in the third month after your loan was issued.

What if I miss a payment?

Every time you miss a payment, Tesco will charge you £12. The lender will also charge you £12 every time a default notice is issued. Missing payments may also have a negative impact on your credit score.

Tesco encourages you to get in contact as soon as possible if you are struggling to repay your loan, as you might be able to reduce the amount you pay for a period of time or gain more time to pay back the loan.

It is also possible to apply for a two-month payment break at the start of your loan, to delay your initial repayments. It's worth noting that you will be charged interest during this break and because the loan term will be two months longer, you will pay an extra two months interest overall.

Can I pay off a Tesco loan early?

There are two ways you can pay off your Tesco loan early. You can make additional payments towards your loan free of charge, which will automatically reduce the term of your loan. This means you can potentially pay your loan off faster, and save on interest.

Alternatively, you can pay the full loan amount back in one go. If you choose this method, you will be charged up to two months’ interest on your remaining balance. Depending on how early you settle the loan, this may still mean an overall saving on interest paid.

What can I use a Tesco loan for?

There are a number of different things you can do with a Tesco loan, including:

Buying a car

If you want to purchase a new set of wheels but lack the cash to do so, a Tesco loan can help spread the cost over a number of months or years.

Debt consolidation

If you have multiple debts across different lenders, you could take out a Tesco loan to consolidate those debts into one monthly payment with a single provider.

Before consolidating your debts, it is important to calculate the cost of your existing debt, and compare it to the cost of your new loan. Interest rates, term lengths and early repayment fees should all be taken into consideration before you carry out your debt consolidation.

Of course, cost isn’t the only factor you will need to consider, and you may choose to consolidate your debts even if it is more costly, in order to create a more manageable payment plan.

Home improvements

Whether you want to redo your kitchen, build an extension or convert your attic into a bedroom, you can use your Tesco loan for a range of significant home improvements.

Weddings

Even a small wedding can end up costing a lot of money. A Tesco loan can help towards building your big day.

Holidays

If you are itching to satisfy your wanderlust, a Tesco loan can help pay for the trip of a lifetime.

Tesco loan eligibility criteria

In order to successfully apply for a Tesco loan, you will need to at least meet the following criteria:

  • be between 18 and 74 years old (or from age 22 if the loan is for debt refinancing)
  • be in employment with no 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.

Can I get a Tesco loan with bad credit?

While not impossible, a poor credit history can make it much harder to apply for an unsecured personal loan. And if you are successful, you may be offered a higher interest rate.

Tesco does not offer dedicated bad credit loans.

» COMPARE: Bad credit loans

Can I top up a Tesco loan?

It is possible to top up your Tesco loan, from an additional £1,000 to a maximum of £35,000, including your original loan amount. For example, if you have borrowed £5,000 already, the maximum you could borrow in addition would be £30,000.

In order to be eligible for a top-up, you will need to have made at least eight consecutive monthly payments on your original loan.

If you choose to top up your loan, Tesco will set up a new loan for you, combining your remaining loan balance and the additional funds you want to borrow. This means you could end up on a different interest rate to your original loan.

An alternative to topping up your existing loan is to apply for a second loan with Tesco. You can have a maximum of two loans at a time with Tesco. And if your original loan was a joint loan, you can only get a second loan as a single applicant.

How to apply for a loan from Tesco

Your Tesco loan application will likely contain the following steps:

  1. You submit your application, with the relevant documents and information.
  2. Tesco carries out a credit check, and assesses your application.
  3. You are either approved, approved in principle, referred or declined.
  4. If you are approved or approved in principle, you will receive documents within five days that you need to check, sign and return to Tesco. If you are referred, you will need to provide Tesco with more information before a decision is made about your application.
  5. Tesco will carry out any final checks related to your application.
  6. If the lender is happy with the information you have sent, your loan will be fully approved, and the funds will be sent to your bank account.

How long does it take for a Tesco loan to be approved?

Your personal circumstances, how organised you are, and where you apply can all affect how long it takes for your Tesco loan to be approved.

If you apply online, it is possible to get an instant decision regarding whether your application has been successful, declined, or if Tesco needs more information.

If you apply over the phone, or Tesco needs more information, the whole process can take between five and 10 days.

Once everything has been approved, it can take up to 48 hours for the funds to reach your account.

Tesco customer reviews

On TrustPilot, Tesco Bank has a rating of 4 out of 5, based on over 6,900 reviews.

On the App Store, Tesco Bank has a rating of 4.8 out of 5 based on over 243,000 reviews,

And on the Google Play Store, Tesco Bank has a rating of 4.6 out of 5 based on 13,800 reviews.

These ratings apply to Tesco Bank’s range of services, not just its personal loans.

This information is correct as of 22 September 2022.

Tesco Loan FAQs

Is it easy to get a Tesco loan?

How easy you will find it to get a Tesco loan depends on a range of factors, including how much you want to borrow, how long you want to borrow for, and your own financial circumstances and credit history.

If you apply online, you can potentially get an instant decision, whether that’s a yes, a no, or a request for more information.

Do you get Clubcard points on a Tesco loan?

Currently, Tesco does not offer Clubcard points on loan repayments.

About the author

Connor Campbell
Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The Independent. Read more

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