Tesco in market for borrowers

TESCO has entered the personal loans market — but borrowers have been warned to read the small print.

Tesco, which already offers credit cards and life assurance here, has teamed up with Ulster Bank to provide loans of up to €30,000 to its Irish customers. The loans will be repayable over periods of up to 10 years but borrowers will face higher interest rates for smaller loans.

Loans between €2,500 and €5,000 will attract a fixed rate of 11.9%. The rate falls to 8.9% for loans between €5,000 and €8,000 and 7.9% for amounts over €8,000. Borrowers who take out fixed rate loans will be unaffected by interest rate increases by the European Central Bank over the duration of their loan.

“We are delighted to be able to cut the cost of borrowing for consumers,” said Tesco Ireland’s Dermot Breen.

Tesco’s personal finance operations have enjoyed considerable success in Britain, but attempts at encouraging Irish customers to take out a credit card have been hindered by the €40 Government duty.