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

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

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

Zopa Bank will be embedded into the John Lewis Money website and customers can get a pre-approved loan within three minutes within their personal limit, without the need for hard searches that impact their credit score.

It is claimed that once the loan is approved, customers can get their money within two hours.

Available loans range from £1,000 to £35,000 with terms from one to seven years.

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

All personal loans that John Lewis applies for on its website are processed through Zopa.

Founded in 2005 but becoming a fully licensed bank in 2020, Zopa offers 1.3 million customers personal loans, credit cards, point-of-sale retail finance, car finance, savings accounts and health financial instruments.

Current accounts are planned to be launched this year.

How does it compare to other personal loans?

The John Lewis loan through Zopa has an APR of 9.9 percent, making it higher than the best purchases from competing providers.

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

Tesco Bank customers can get a loan of between £3,000 and £35,000 over a term of one to ten years.

Santander offers loans ranging from £1,000 to £25,000, with terms ranging from one to five years.

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

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

Andrew Hagger of personal finance website MoneyComms said: ‘The annual interest rate of 9.9 per cent on a £10,000 loan for £209.91 per month for five years is slightly higher than current market-leading products, although some customers have very good credit can get lower rates from the John Lewis/Zopa partnership.

‘It’s good to see extra competition in the personal loan market, but if consumers shop around there are cheaper personal loans to be had – depending on 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 better-priced credit.

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

“Whether it’s helping to renovate homes, buy a car or help finance a unique trip, we hope this additional financing option can help our customers realize their ambitions.”