Amazon to offer loans to customers buying products from its website

Amazon has started offering loans to customers who buy products from its website, a move that could shake up the UK furniture and electricals market.

Under the offering from the world's biggest online retailer customers will have  a "pay monthly" option on orders of over £400, which could include multiple items.

According to commentators, Amazon Pay Monthly posed a new threat to established high street retailers such as John Lewis and could attract many new customers to the website.

The loan could extend over two, three or four years depending on the size of the purchase, with Amazon charging interest at an advertised rate of 16.9 per cent. Customers would not need to pay a deposit, which meant the first payment was their opening monthly installment.

Only products sold and dispatched by the company would be eligible, meaning that products sold on Amazon by third parties would not be included.

The Guardian reported, quoting a source close to Amazon, the move was a game changer for the company,

The retailer had signed up Hitachi Capital to run the service. Hitachi also offers interest-free credit on furniture for John Lewis.

The UK was said to be the first country in the world where Amazon offered installment loans, though shoppers in the US could buy on credit using an Amazon store card.

A Hitachi spokesman said, ''It means you can go straight from choosing a new dishwasher or fridge to accessing finance options through us, all while staying on the Amazon site,'' thesun.co.uk reported.