Your complete guide to the best loans

Obtaining a loan is simpler than ever for most of us, with online applications and acceptance in moments. Even if your credit history could be better, it’s likely you’ll find a willing lender easily enough.

However, loans come in all shapes and sizes to suit differing purposes, timescales and amounts, so you must ensure you shop around and get the best deal for your circumstances. In this article, we’ll look at the best loans on the market today but be sure to conduct your own research for the very latest offers.

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Best loans over 12-month

Short-term loans are ideal for funding a purchase or perhaps consolidating a debt. According to comparison site money.co.uk, these are the best bets if you want to repay in full within a year.

1. Tesco Bank Personal Loan offers £3,000 to £35,000 from one year up to 10 years. The representative APR is just 2.9% on loans of £7,500 to £25,000.
2. Nationwide Personal Loan Ex/C is available only to existing customers with a current account, mortgage or savings account. £1,000 to £25,000 is available with a representative APR of 3% on £7,500 to £25,000.
3. Nationwide Personal Loan is for members only. The same amount is available but the representative APR is 4.2%.

Cheapest loans over 24-month

If you go for a two-year loan option, giving you more time to pay off the loan, then choosewisely.co.uk recommends these 24-month personal loans.

1. AA Member Loan is available to, you guessed it, AA members. But it’s a cracking deal, with representative APR of 3%. That means if you borrowed £5,000, you’d repay a total of £5155.68.
2. RateSetter offers peer-to-peer lending with an APR of 3.9%. You must be over 21 and have a good credit history.
3. Bank of Ireland Loan is available only to those with a BOI current account, but you can be in mainland UK. Representative APR of 7.5%

Best loans for bad credit

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. The price comparison site knowyourmoney.co.uk has a decent list of the best lenders for unsecured loans.

1. Norton Finance is available only to homeowners wishing to borrow £3,000 to £25,000 from one to 25 years. The representative APR is 15.4%.
2. Freedom Finance lends from only £500 to £25,000, one to seven years with a representative APR of 27.5%.
3. Citrus Loans has a shorter time scale of one to five years with offers of £2,000 to £25,000 and a representative APR of 37%.

Best loans for 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. Money.co.uk has these listed as the top three results.

1. Barclays Premier Barclayloan is for existing Premier account customers. Borrow from £1,000 to £50,000, from two to five years, with a representative APR of 4.3%.
2. Barclays Barclayloan for the bank’s general customers offers the same terms but with a 5.5% APR.
3. JustUs Personal Loan is available from £2,000 to £15,000, from two to five years, with a representative APR of 11.7% APR.

Most 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. Money.co.uk says these three loans are best.

1. Sainsbury’s Bank Personal Loan (Nectar Card) is available to Nectar Card holders only. Borrow £1,000 to £40,000 from one to seven years with a representative APR of 2.9%. You can ask for a payment holiday at the start of the loan and make overpayments to reduce the term.
2. M & S Bank Personal Loan offers £1,000 to £25,000 from one to seven years with a 2.9% representative APR. You can defer your first payment for three months.
3. Zopa Personal Loan offers the same as M & S but with a maximum five-year term. This peer-to-peer lender offers overpayments and no early repayment fee.

Best 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. Personal finance site Finder.com has these listed best with an example borrowing of £5,000 over three years.

1. Amigo Guarantor Personal Loan with a representative APR of 49.9%
2. TrustTwo Personal Loan also runs with an APR of 49.9%
3. UK Credit, meanwhile, has an APR of 53.9%

Best home improvement loans

Perfect if you’re looking to carry out improvements that will add value to your house, such as a new kitchen, bathroom or extension. You should look at a comparable cost of remortgaging your home, but if looking further afield, money.co.uk recommends these three options.

1. Sainsbury’s Bank Personal Loan (Nectar Card) crops up again as a good bet, with 2.9% representative APR of loans from £1,000 to £40,000 over one to seven years. You must be a Nectar cardholder.
2. M & S Bank Personal Loan also offers 2.9% but up to £25,000 over a one to seven-year term.
3. Tesco Bank Personal Loan offers £3,000 to £35,000 with a 2.9% APR and up to ten years to repay it.

Best loans for joint accounts

The positive 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. With that in mind, searching the major providers online offers these solutions.

1. Halifax Joint Loan offers £7,500 to £25,000, from one to five years with a 3.5% APR. You must both be Halifax current account customers.
2. Bank of Scotland Joint Loan comes in at 3.9% representative, also from £7,500 to £25,000 up to five years. You both must have been current account holders for at least a month.
3. Lloyds Bank offers the same terms.

Best long-term loans

These 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. Looking at a £10,000 loan for ten years, the price comparison site gocompare.com suggests these:

1. Tesco Bank with a representative APR of 5.3%, but it comes with an early repayment charge.
2. Masthaven offers 5.7%, but you are not allowed to use this service for debt consolidation.
3. Precise Mortgages offer 5.7% as a homeowner loan and requires a maximum loan to value of 65%.

Best low-interest loans

Probably the best deals around but you must have a decent credit rating. No lender will risk low rates on just anybody! According to uSwitch, these are the top three using an example £7,500 loan over three years.

1. M & S Personal Loan – if you fit the criteria, you might be accepted for this 2.8% representative deal. You must hold an M & S credit card, charge card or budget card but new customers can also apply when they open an account.
2. Yorkshire Bank Personal Loan is 2.9% representative APR, but you must have an income over £15,000 be aged 23 to 74.
3. Sainsbury’s Nectar Cardholder’s Loan crops up again for those who hold a Nectar card. 2.9% APR but you only need to be 18 and earn over £7,500.

Best online loans

Applying online makes getting a loan simple, and you might get acceptance in no time at all. If that’s the case, the money might be in your account sooner than you expected. According to money.co.uk, these are best sites to approach for an online loan.

1. Sainsbury’s Bank Personal Loan (Nectar Card) for £1,000 to £40,000 up to seven years with a 2.9% APR. Must be a Nectar cardholder with a sound credit rating.
2. M & S Bank Personal Loan offers the same APR and loan term, but up to £25,000 is available.
3. Admiral Personal Loan also offers a representative APR of 2.9% with a loan of £1,000 to £25,000 but up to five years to repay.

 Best 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. The Guarantor Loan Comparison site suggests these:

1. Buddy Guarantor Loans offer up to £7,500 up to five years, with a 49.9 representative APR.
2. TrustTwo Guarantor Loans, with a 49.5% APR and up to £10,000 available over five years.
3. Amigo Guarantor Loans offers 49.9%, up to five years, with £500 to £10,000 available.

Best £1,000 loans

The comparison site comparethemarket.co.uk lists these lenders for those looking for a personal loan of £1,000 over an example three years.

1. Lending Works offers a 12.3% APR representative rate and you can use the loan for debt consolidation. Apply online.
2. Hitachi Personal Finance has a representative APR of 14.5%. Applicants must be 21 and have a good credit history.
3. Zopa is 15.5% APR, and you must be 20 with a good credit history. Again, apply online.

Best £5,000 loans

The ideal amount for a new car, holiday or perhaps a purchase for the home, £5,000 over the course of three years can be borrowed from these places best, according to comparethemarket.com

1. Clydesdale Bank with a representative APR of 3.4%. Get an instant decision online, and you can use this for debt consolidation.
2. Admiral Personal Loan also has a 3.4% representative APR. Admiral won the “Best Newcomer” at the consumer credit awards 2018.
3. Zopa joins the 3.4% APR club with this loan. Debt consolidation is allowed, but you must also have a good credit history.

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