Our loan comparison table compares the representative examples of 61 persona loan providers in the UK. We show the representative example as this is the cost for a typical person approved by that loan provider. It’s important to note that rates can differ from person to person based on status.
Cheapest Personal Loans Compared
We have ranked the personal loan providers in the UK by their representative APR. You can use this as a guide to see where to apply for the lowest interest payments. You can also sort this table by loan term and size.
| Loan Provider | Representative APR | Loan Size | Loan Length |
|---|---|---|---|
| AIB | 5.60% | 10000 | 60 months |
| Sainsbury's Bank | 5.80% | 10000 | 60 Months |
| Santander | 5.80% | 10000 | 60 months |
| Halifax | 6.30% | 7500 | 12 months |
| Tesco Bank | 6.30% | 7500 | 60 months |
| Bank of Scotland | 6.40% | 10000 | 48 months |
| HSBC | 6.40% | 7000 | 60 months |
| Lloyds Bank | 6.40% | 7500 | 48 months |
| M&S Bank | 6.60% | 10000 | 60 months |
| Norton Finance | 6.70% | 12000 | 48 months |
| First Direct | 6.90% | 7000 | 60 months |
| TSB | 6.90% | 7500 | 60 months |
| Virgin Money | 6.90% | 7500 | 60 Months |
| NatWest | 7.10% | 10000 | 60 Months |
| Royal Bank of Scotland | 7.10% | 10000 | 60 Months |
| Ulster Bank | 7.10% | 10000 | 60 Months |
| Nationwide BS | 7.30% | 10000 | 60 months |
| Danske Bank | 7.40% | 7000 | 36 Months |
| Novuna Personal Finance | 7.40% | 7500 | 60 months |
| MBNA Limited | 8.70% | 10000 | 48 months |
| Metro Bank | 8.90% | 10000 | 60 months |
| RateSetter | 8.90% | 10000 | 60 months |
| Barclays Bank | 9.90% | 10000 | 60 months |
| AA | 10.70% | 4000 | 36 months |
| Loans Warehouse | 10.70% | 46000 | 180 months |
| Post Office Money | 10.70% | 4000 | 36 months |
| JustUs | 13.01% | 10000 | 60 months |
| Central Trust | 13.90% | 37500 | 120 months |
| Creation Financial Services | 13.90% | 7500 | 36 Months |
| Bank of Ireland UK | 15.40% | 4000 | 36 months |
| Shawbrook Bank | 16.60% | 10000 | 60 Months |
| Admiral | 16.90% | 10000 | 60 months |
| Lending Works | 16.90% | 1000 | 12 months |
| The Co-operative Bank | 16.90% | 4000 | 36 months |
| Zopa | 22.90% | 10000 | 60 Months |
| LiveLend | 25.70% | 5000 | 42 months |
| My Community Bank | 26.20% | 15000 | 36 months |
| My Community Finance | 26.20% | 5000 | 48 months |
| Monzo Bank | 27.90% | 1000 | 36 months |
| Evolution Money | 28.96% | 10000 | 120 Months |
| Lendable | 30.30% | 7500 | 36 months |
| UK Credit | 34.90% | 8000 | 60 months |
| Finio Loans | 39.90% | 2000 | 24 months |
| 1plus1 Loans | 47.80% | 3000 | 36 months |
| SUCO | 48.90% | 2000 | 48 Months |
| Talk Loans | 49.70% | 4000 | 36 months |
| 118 118 Money | 49.90% | 1800 | 24 months |
| Choose Wisely | 49.90% | 3250 | 36 months |
| Guarantor My Loan | 49.90% | 5000 | 36 months |
| Lifestyle Loans | 59.90% | 3000 | 36 months |
| Progressive Money | 61.91% | 3450 | 36 Months |
| Bamboo | 69.90% | 2500 | 24 months |
| Salad Money | 79.50% | 1000 | 18 Months |
| George Banco | 79.90% | 3500 | 36 months |
| Everyday Loans | 99.90% | 3000 | 24 months |
| Varooma | 209.42% | 10000 | 12 months |
| Savvy | 334.40% | 1000 | 12 months |
| Fair Finance | 341.41% | 500 | 10 months |
What is a personal loan?
With a personal loan a bank or another kind of financial institution will lend you money to be paid back over a set period of time. You will usually be able to borrow anything from around £1,000 to tens of thousands of pounds with loans paid back normally over a period of years. However, some short-term loans are available with shorter repayment terms although these often come with a higher interest rate.
You will pay for the loan by paying interest which is usually set as an annual percentage rate (APR). The cost of this rate varies depending on the provider and your own personal financial history.
The Different Types of Personal Loan
- Debt Consolidation Loans
- Home Improvement Loans
- Guarantor Loans
- Joint Accounts Loans
- Flexible Loans
- Short Term Loans
- Bad Credit Loans
- Long-Term Loans
- Low-Interest Loans
- Tenant Loans
- Small Loans
- Business Loans
Debt Consolidation Loans
If you have multiple debts and bad credit, use one of these loans to consolidate them into one debt, with one payment term.
What are debt consolidation loans
Managing and keeping track of several debts at a time can be tricky but a debt consolidation loan can help remove the hassle of different bills. Here we’ll go through what debt consolidation loans are and the best debt consolidation loans on the market at the moment.
It is a form of personal loan that you put towards paying off all your debts such as credit cards or overdrafts.
The benefits of debt consolidation loans
Getting a debt consolidation loan removes the hassle and worry about following and meeting different payment dates or minimum amounts and can make it easier to keep track of your debts.
It also helps with cashflow as the same amount of money will be coming out at the same time each month.
You should also be able to lower your monthly repayments in contrast to what you are currently paying on all your credit card or overdrafts.
The risks of debt consolidation loans
Your monthly repayments may be lower but you could end up paying back more than what the debt is worth depending how long the loan is and if there are any fees.
A debt consolidation loan isn’t necessary a solution if you are regularly getting into debt as it is just swapping one type for another and if you can’t keep up with these repayments it could harm your credit rating.
Do consolidation loans hurt your credit score?
All forms of debt are registered on your credit report and score which lenders use to consider applications for finance such as a mortgage or further loans.
Your score could be impacted if you miss repayments on a debt consolidation loan and if you make too many applications as lenders may be wary of how much you rely on credit.
Top five debt consolidation loans in the UK
- Cahoot – Provided by Santander, Cahoot has the lowest rate currently on the market at 2.8% APR. You can borrow up to £20,000 for between one and five years and need a minimum income of £6,000. The loan can be repaid early but Cahoot may charge an extra 30 days’ interest..
- Clydesdale Bank – Clydesdale Bank offers a rate of 2.9% APR for between one and seven years on up to £25,000. You can repay early but will be charged an additional 58 days’ interest. You will need a minimum income of £15,000.
- Nationwide – If you already bank with Nationwide you could get a personal loan rate of 2.9% APR to borrow up to £25,000. Existing customers will need a minimum income of £9,000 and can borrow for up to seven years. There are no charges if you want to settle your loan early.
- First Direct – Loan rates get pricier when you are looking to borrow beyond £25,000. First Direct offers loans of between £25,000 to £30,000 for 3.3 per cent APR for up to seven years for its current account customers.
- Barclays Bank – If you are a Barclays customer and have really large debts, you could get a personal loan of £50,000 for 5.9% APR. This is only for its existing premier account customers though. Alternatively, Tesco Bank offers 6.6% APR on a relatively high personal loan of £30,000 to £35,000 for new and existing customers.
How to compare debt consolidation loans
Compare the new loan with your existing circumstances and whether you will be better off.
You should compare loans on the interest rate, term but also if there are any fees or interest charge for repaying early. Some may also offer repayment holidays or have rates only available for existing customers.
Some providers may only offer debt consolidation loans to certain age groups.
Check if you can do a soft search to see if you would be eligible for a loan as it may harm your credit rating if you make too many applications or are rejected.
Alternatives to debt consolidation loans
- Balance Transfer Credit Card: A personal loan isn’t the only product that can consolidate debts. You could also use a balance transfer card. This pays off credit card debt and moves it to a new provider where in some cases you can make interest-free repayments over a long period.
- Remortgaging: Homeowners could be better off remortgaging especially if you have a large debt. Mortgage rates are at record lows and if you have enough equity in your home you could release some of the cash through a remortgage to settle other debts. This will increase your mortgage payments and puts your home at risk if you fall into arrears.
- Debt Management: Rather than taking on more debt, it may be possible to arrange a debt management plan. This is an agreement between struggling borrowers and lenders to help setup more manageable repayments. A debt adviser can help arrange this or you could speak with charities such as StepChange, Payplan and National Debtline.
Home Improvement Loans
A home improvement loan is perfect if you’re looking to carry out improvements that will add value to your house, such as a new kitchen, bathroom or extension
What are Home Improvement Loans?
Home renovations can be expensive but will boost your living space and ultimately the value of your property.
Whether it is a new kitchen or an extension, you will still need a lot of cash to pay for everything from builders to furniture and even architects for larger projects. This is where a home improvement loan can help.
A home improvement loan is a form of personal loan that gives you the money needed upfront to fund changes around the house.
How to choose a home improvement loan?
There are two options when select home improvement personal loans.
You could apply for an unsecured loan. This is assessed based on your credit report and is usually best for amounts up to around £30,000.
If you need to borrow a larger amount then it may be worth going for a secured loan. This is a loan secured on an asset such as your property and you can usually get up to £100,000.
Terms range from five years to as long as 25. The risk with a secured loan is your property is at risk if you fail to keep up with repayments.
The rate and term are important as you need to ensure you can afford the repayments and you also need to check the amount you are offered reflects the cost of the works.
Remember, the costs of renovations can often be more than expected so it is best to budget for more if you can afford it.
Does a home improvement loan affect my credit score?
All debts such as loans appear on your credit report. Your credit score could be reduced if you fail to keep up with repayments. Lenders may also be wary of providing finance to you if they see you have applied or already have a lot of credit.
It is best to try to do a ‘soft search’ when applying for a loan so you can see what you are most likely to be accepted for and it doesn’t leave a footprint on your credit report until you apply.
Benefits of home improvement loans
- Don’t have to raid your savings: A new kitchen can cost on average £8,000 according to Householdquotes.co.uk while an extension could go £2,000 per m2. Not many people will have this much spare cash lying around. A home improvement loan gives you access to the money you need to fund your project.
- Boost the value of your property: You need to ensure you can meet the repayments of a home improvement loan but the changes can also boost the value of your property, which could be beneficial when you come to sell.
Risks of home improvement loans
- Your home or credit report may be at risk: A secured loan will let you access a larger amount of money but you are also putting your home at risk of repossession if you can’t afford to repay. Similarly, even with an unsecured loan, if you fall into arrears you could harm your credit score which will make it harder to access finance in the future.
- Budget: Set a budget before you borrow as you don’t want to pay too much interest for money that isn’t being put to good use. However, remember that projects can also go over budget so you don’t want to run out of money. There may also be unexpected expenses that occur along the way, meaning the loan may not stretch far enough.
Bad credit and home improvement loans
The best rates on personal loans are offered to those with clean credit scores. Lenders only have to provide the advertised rates to 51 per cent of applicants. If you are in the other cohort you may end up paying a higher rate.
Top home improvement loans available right now
- Cahoot: Cahoot has the lowest rate currently on the market at 2.8% APR. You can borrow up to £20,000 for between one and five years and need a minimum income of £6,000.
- Admiral: The best rates on personal loans are for between £7,500 and £20,000. If you wanted a lower amount, Admiral offers loans up to £7,000 for 3.4% APR for one to five years. You will need a minimum income of £10,000 and must not currently be bankrupt or received any county court judgements.
- First Direct: If you have a larger project, First Direct offers loans of between £25,000 to £30,000 for 3.3 per cent APR for up to seven years but you would need to open one of its current accounts. Those with a bigger budget could get a personal loan of £50,000 for 5.9% APR but that is only for Barclays premier customers.
Secured options for home improvement loans
You may be better off using a secured loan for big budget jobs that run closer to £100,000. The value of your property is taken into account and used as a security. You can get a secured loan of £80,000 for five to 25 years for 3.6% APR with Paragon Bank or 3.57% for £100,000.
Alternatives to home improvement loans
- Credit card: An authorised overdraft on a credit card can be a useful way to pay for items upfront especially if it is a relatively low amount. You could also find credit cards that offer cashback or interest-free spending periods. But remember to repay the bill each month or interest will be added.
- Savings: If you are not in a rush to get your works done it may be worth setting a budget and seeing how much you can afford to save each month. This means you don’t have you take on extra debt, but ensure you still have money put aside for day-to-day emergencies.
- Remortgage: Mortgage rates have hit record lows in recent years. If you have enough equity in your property you could remortgage to release some cash. This will increase your monthly mortgage repayments but will typically give you access to a larger amount than a personal loan.
Guarantor Loans
If you can’t get a loan for whatever reason, perhaps through having bad credit, then apply for a loan where someone else acts as the guarantor, perhaps a relative. If the loan defaults, they’re liable for the debt.
Joint Accounts Loans
The positive of a joint account loan is you might, as a couple, be able to borrow more together. The negative is each of you may be asked to repay the debt in full if the other person can’t.
What is a joint account loan?
A joint loan combines two incomes and credit reports, meaning borrowers can often boost their chances of getting accepted, borrow more and share the repayments. You can apply for a joint loan with your partner, friends or family.
Benefits of a taking out a joint account loan
- Combined credit scores: When two people apply for a loan a lender will consider both credit files, which boosts your chances of getting approved. Partnering with someone who has a better credit score may also help improve yours in the long term if you repay on time.
- Boost your income: Combining two incomes gives you a better chance of meeting affordability requirements, helping to get a better rate and borrow larger amounts if needed.
- Share the repayments: The responsibility of repaying a joint loan is shared so you can combine your incomes to ensure it is repaid rather than having to do it alone.
Risks of applying for a joint loan
- Joint liability: Regardless of who the money is for or how it is spent, the debt always has to be repaid in full. This can cause an issue if you get divorced or fall out with someone you borrowed with.
- Credit report risk: A joint loan links your credit file with the other person. If the loan falls into arrears both reports and scores will be affected, which could harm any future applications.
What to consider when applying for a joint loan
The rate and term are important, as is any flexibility to take a payment holiday or repay early.
Joint loans add extra complexity as both parties need to be in for the long haul. Whether you are borrowing as husband and wife, partners or just friends, it may be worth drawing up a legal agreement to decide how the loan is repaid if you separate.
Top joint loans available right now:
You can access standard personal loan rates through a joint application. The sweet spot for the best rates is between £7,500 and £15,000:
- Admiral: offers an APR of 3.4% to borrow from £5,000 to £7,000.
- Cahoot: currently offers the lowest rate on the market at 2.8% APR for loans between £7,500 and £20,000 for one to five years.
- TSB: Borrowers can get a loan of up to £25,000 for between one and seven years at 2.9% APR from TSB.
Those looking fora £30,000 loan can get an APR of 3.3% with First Direct. Barclays offers a rate of 5.9% for a bumper £50,000 loan but you need to be a premier customer.
Alternatives to taking out a joint loan
- Credit card: A credit card may be an effective way of accessing smaller amounts, especially if you can find one offering interest-free spending. Don’t forget to make the monthly repayments or you will be charged interest.
- Remortgage: Mortgage rates are at record lows and you could use the equity in your property to release extra cash. This will increase your mortgage repayments and put your home at risk if you fall into arrears.
Savings: If you are not in a rush and have an idea of how much you need, why not put a certain amount aside each month if you can afford to do so? That will save on interest and you could even put it in a savings account in the meantime.
Flexible loans
Sometimes called a flexi loan, a flexible loan allows you to increase or decrease your loan amount as you go along or vary the repayments. Some permit you to miss the occasional payment.
Short Term Loans
These are the best bets if you want to repay in full within a year. Short-term 1 year loans are ideal for funding a purchase or perhaps consolidating a debt.
Bad Credit Loans
Even if you’ve been refused credit in the past owing to a poor credit history, you can get a loan. But because you have a higher risk attached to your application, you’ll be paying more in interest.
Late payments, county court judgements, defaults, bankruptcies or even just a short track record of managing debt all reduce your credit score. This makes it harder to get a loan but not impossible.
Taking out a bad credit loan can help you access finance and build up your credit score at the same time.
Bad credit loan benefits
Access to finance: A low credit score doesn’t necessarily mean you can’t afford to repay a loan but lenders will be more wary so while you won’t get the best rates, a bad credit loan will still provide some sort of funding if you need to borrow money.
Restore your credit score: You need a history of meeting repayments to build up your profile but can’t get that without having access to credit. Repaying a bad credit loan on time will eventually rebuild your credit report and boost your score, giving you better rates in the future.
Bad credit loan risks
Higher rates: You will pay more than the best buys for a bad credit loan to reflect the extra risk a lender is taking.
Your assets: Some providers will take a security on assets such as a car or your home. This helps borrow more but also puts these items at risk of repossession if you fail to keep up repayments.
Can you afford it? You need to be able to afford the monthly repayments or face paying penalties and potentially harming your credit report even more.
How to choose bad credit loans
There are different types of bad credit loans.
Guarantor loans require someone to effectively underwrite the borrowing by being held liable for any missed payments or defaults.
You could also take a secured loan against your own assets such as a home or car.
Peer-to-peer lenders may be a good option as they won’t operate an instant computer says no policy that the legacy systems at a bank will have.
Do a soft-search initially to check loans you are most likely to be approved for as even just making several applications can reduce your credit score further.
Top bad credit loans available now:
- JustUS: The P2P lender offers personal loans between £2,500 and £25,000 at 11.7 per cent APR for two to five years.
- My Community Bank: Personal loans from £1,500 to £25,000 for one to five years at 25.9 per cent APR.
- Suco: Guarantor loans of up to £15,000 for one to five years at 29.9 per cent APR. The guarantor must be a homeowner.
- 1st Stop: Only for homeowners with minimum age of 21, but offers loans of £2,000 to £15,000 at 30.8 per cent APR for up to six years.
- TrustTwo: Get a guarantor loan backed by a non-homeowner for 49.9 per cent APR.
Alternatives to bad credit loans
A debt consolidation loan may be better if you are struggling with managing your debts and then apply later when your credit score is better.
There are credit cards for those with bad credit that let you borrow smaller amounts but will have higher APRs if you miss payments. Your current account may have an approved overdraft but remember you will face penalties if you go beyond the limit. It is also worth checking if there is a local credit union you are eligible to join as these non-profit groups can provide finance to members.
Long-Term Loans
A long-term loan might be the best option if you want to reduce your monthly costs. The downside, of course, is that it will take you much longer to settle the debt, and over that time you may pay more in interest.
Low-Interest Loans
A low interest loan offers the best interest rates around but you must have a decent credit rating. No lender will risk low rates on just anybody!
Tenant Loans
Tenant loans are liable to have a higher interest rate payable since the applicant won’t have a home to secure against the debt. The best option is to plump for a tenant guarantor loan, whereby someone close to you secures the loan.
Small Loans
The ideal amount for a new car, holiday or perhaps a purchase for the home, compare lenders for borrowing upto £5,000.
Business Loans
Businesses need finance to grow and become a success. Both start-ups new to business and established companies could benefit from an injection of cash to fund expansion, cover short term cash flow issues or to refinance borrowing at a better rate with a business loan.
Personal Loan FAQ:
Which bank is best for personal loans?
It all depends. Banks can vary considerably in their terms and costs, such as who they are willing to lend to, additional fees and repayment terms. These may vary from one person to another depending on your credit history. To get the best deal you should shop around a number of providers to compare costs and terms.
How much can I borrow with a personal loan?
You can get a personal loan for anything between around £1,000 up to around £100,000 although a few may offer more. However, this upper limit isn’t necessarily what they will provide to all people. This will depend on many factors such as your income, financial situation and history. When you apply for a loan, they will perform a series of checks before deciding how much they are willing to offer.
What happens to personal loans when you die?
If someone dies before a loan is repaid the outstanding debt is paid out of their estate. If they leave no will behind, the administrator is will be responsible for paying any debts out of the estate. Family members will only be personally liable for a loan if they have taken out a joint loan. If there is no estate left behind the loan dies with the person.
How do you get a personal loan?
To get a personal loan you can browse through available lenders. You will then provide all documents they ask for such as your national insurance number or employment details to help them make a decision. To see if you are likely to be approved you could check your credit score, consider your liabilities and set a repayment plan so you know how you will pay it off. You can usually apply direct to a loan provider either online, by phone or in person.
Are personal loans taxable?
Because you will have to pay it back a personal loan is not considered in come. Therefore, you will not have to declare it to the tax man. Any lender, though, will be receiving payments from the loan in the form of interest and fees. This is income and so they will have to declare it to inland revenue.
Can you increase a personal loan?
In some cases, you may be able to increase your personal loan. If you’ve been regularly paying it back, the lender may start to see you as a more reliable borrower. As such, they might be happier to let you borrow more. Sometimes they will even contact you offering to top up your loan, especially as it nears its end. You be careful about accepting such an offer as it could cost more in the long run and there may be better options available elsewhere.
Can a personal loan be transferred to another person?
Sometimes. A bank or non-bank financial institution may offer a personal loan balance transfer which would allow you to transfer the loan to another person. However, they will usually perform all the usual credit checks before deciding if they are willing for this person to take on the remainder of the loan. You may sometimes be able to transfer the loan to another provider or another loan product.
Can you freeze a personal loan?
If you’re struggling to make your repayments, some lenders may allow you to freeze your loan to make it more affordable. For example, some lenders may offer the chance to defer payments for one month or two without accruing more interest to help you through a difficult patch. This should not affect your credit score. However, if you take an alternative approach by reducing repayments this could not only increase the overall cost of the loan but could also harm your credit rating.
How can you get a personal loan with poor credit?
Even if you have poor credit, you may be able to get a personal loan. Indeed, there are many providers which specifically market loans for people with poor credit. They may be more forgiving, but there is a catch. The chances are you’ll have to pay a higher interest rate making the loan considerably more expensive over the long run.