John Lewis now offers personal loans of up to £35,000 to customers, but can better rates be found elsewhere?

John Lewis is offering personal loans of up to £35,000 to customers through a partnership with Zopa Bank.

The retail giant announced that it is expanding its offering through its consumer finance division, John Lewis Money.

Zopa Bank will be integrated into the John Lewis Money website and customers will be able to get a pre-approved loan within their personalized limit in less than three minutes without extensive searches affecting their credit scores.

It states that once the loan is approved, clients will be able to access their money in less than two hours.

Loans available range from £1,000 to £35,000 with terms ranging from one to seven years.

Customers can get loans for both online purchases and offline in-store purchases.

All personal loans requested by John Lewis on their website will be made through Zopa.

Zopa, which was founded in 2005 but became a fully licensed bank in 2020, offers 1.3 million customers personal loans, credit cards, point-of-sale retail finance, car finance, savings accounts and tools financial health.

It is scheduled to launch checking accounts this year.

How does it compare to other personal loans?

The John Lewis loan through Zopa has an APR of 9.9 per cent, making it higher than best buys from rival providers.

Tesco Bank, M&S Bank and Santander are currently the leaders in the personal loan market.

Tesco Bank customers can take out a loan of between £3,000 and £35,000 over one to 10 years.

Santander offers loans ranging from £1,000 to £25,000 over a period of one to five years.

M&S Bank customers can take out a loan of up to £25,000 which can be repaid over one to seven years.

Tesco Bank offers loans with an annual interest rate of 6.1 per cent or £193.03 per month to Clubcard holders, while M&S Bank and Santander have a representative annual interest rate of 6.2 per cent or £193.03 per month. 193.47 per month, for those who qualify for the best rates.

Andrew Hagger, of personal finance website MoneyComms, said: “The 9.9 per cent APR on a £10,000 loan at £209.91 a month over five years is slightly higher than the market’s leading products. current market, although some customers with very good credit may be able to get lower rates from the John Lewis/Zopa partnership.

“It is good to see additional competition in the personal loan market, however, if consumers shop around they will be able to obtain personal loans at lower rates, subject to their credit status.”

Tim Waterman, chief commercial officer at Zopa Bank, said: “Consumers have long trusted John Lewis and we are pleased to be working with them to help more people access credit at better prices.”

​​Andy Piggott, director of credit and banking at John Lewis Money, said: We are very excited about this next phase and the ability to offer their loans directly to our customers through our own John Lewis Money website.

“Whether it’s helping with home renovations, buying a car or helping finance a trip of a lifetime, we hope this additional financing option can help our customers turn their ambitions into reality.”