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  1. Borrowing
  2. Loans

Loans

Guides and tools to help you get a loan or cut costs

Am I eligible for a loan?

  • Check if a loan is right for you. This page has links to all the information you need on everything loans
  • If in doubt, DON'T borrow. And if struggling with debt, read our Debt help guide
  • Use our eligibility calculator to find your options and acceptance odds without impacting your credit score
Use our eligibility calculator

How much can I borrow?

  • Check how much a loan will cost you, including monthly repayments and total loan cost.
  • Decide how much you can afford to borrow, based on your current income.
  • See if you could save by switching loans, if you already have a personal loan.
     

Use our personal loans calculator

 

Loans: what you need to know

A personal loan means borrowing money and paying it back (plus interest), in fixed monthly repayments over an agreed time. See our loans guides for full info:
 

How do I get best buy rates? 

If you’re looking for a loan, check top rates below – and full options in our loans guide. Only borrow if you need to and can afford the repayments. If you do decide to get a loan, borrow as little as you need and repay as quickly as you can.

How the MSE loans eligibility calculator works 

Our loans eligibility calculator will give you an idea of your acceptance odds for a personal loan without it impacting your credit history. 

  • Enter your details as accurately as possible, including employment, income and postcode.
  • Our calculator will do a 'soft' search on your credit file, which lenders won't be able to see.
  • See your chances of approval before you apply for a number of best buy loans.

Try our Loans Eligibility Calculator to check your acceptance odds

Watch: Martin Lewis explains personal loans 

  • Make sure any borrowing is planned, is one-off, and is budgeted that you can afford it.
  • Minimise how much you borrow and repay it as quickly as you can.
  • If in doubt, DON'T borrow.
  • Use our eligibility calculator to find your options and acceptance odds without impacting your credit score.
  • If you’re borrowing very small amounts a loan may not be right for you.

Watch Martin's full video or... 

Read our full loans guide

How can I get approved for a loan? 

You'll have to pass a credit check, which involves the lender assessing whether they want to lend to you based on your income and financial history. Some ways to strengthen your application include:

  • Improve your credit score to increase your odds with tips in our guide

  • Check that your income will comfortably cover the loan repayments alongside other expenses using our loan calculator
     
  • Using our eligibility calculator to check your odds without impacting your credit history.

Try our Eligibility Calculator

How do credit checks work? 

When you apply for a loan, the lender will look at your credit report at one or more of the UK's three credit reference agencies before deciding to lend.

Each agency has data on your existing credit accounts, recent applications, how much you owe and whether you’ve repaid other credit on time. Lenders use this info to try to predict your future repayment behaviour.

Then, each time you apply for a loan, it’ll be marked on your credit file.

Find out more about how credit scores work

Martin Lewis explains how to borrow responsibly with a loan 

Martin Lewis: "Loans are a form of debt. You do not want debt unless you really need it. So please make sure any borrowing you're doing is planned, is one-off and is budgeted for (so you can afford the repayments), and that you minimise the amount you borrow and repay it as quickly as you possibly can. If you can't do all of this, then DON'T borrow.

If you do decide to apply for a loan, our eligibility calculator will show you how likely you are to be accepted for different loans, including whether you're pre-approved for any (meaning you'll definitely get them if you apply). This only requires a 'soft' credit check, so it doesn't affect your credit score or impact your ability to get future credit (whereas a making a full application will, even if you're declined).

If you need to borrow very small amounts then a loan may not be right for you. You may well be better off with a money transfer credit card."

MoneySaving successes


Below we've featured some fantastic success from MSE users who've used these guides to apply for or manage personal loans. If you've found success using our tools or guides, let us know via email. 

"Thanks to your switching advice I've saved over £3,000 in interest payments by securing a cheaper rate on my loan. My old loan had a whopping 16.2% APR and I was being charged £6,300 interest over six years, but after switching my new rate is just 2.75% APR. Thanks Martin!"
 

- Mark

"Through your website’s loan eligibility calculator I found that RateSetter offered me a pre-approved loan at 2.7% APR which I took up. I was done and dusted the same evening!"
 

 

- Robin

"I bought a car on finance and didn’t check the interest rate as the salesman said it was better to use their finance. 

After making two payments I found your loan swap advice. I didn’t reduce my monthly payments but I shortened my loan term by a full year, saving me over £3500!"

- Sharon

Loans FAQs

  • Am I eligible for a loan?

    Usually, applying to a lender is the only way to know if you'll be accepted for a loan. Yet that marks your credit file, and could affect your ability to get future credit. Our Eligibility Calculator uses a 'soft search' to calculate and show your chances of acceptance before applying.

  • How do lenders decide whether to give you a loan?

    You'll need to pass a credit check to get a credit card. This lets the lender work out how 'risky' you are to lend to, and takes into account your income and other financial commitments. It can then either accept or decline you.

    The criteria differs between lenders – you could be accepted by one but declined by another. So it’s better to use an eligibility checker to check your chances of acceptance before applying.

    If you go on to apply, any application will leave a mark on your credit report, even if you’re declined, which could affect your ability to get credit in future (this is especially true if you make multiple applications in a short time period). Read our guide to how credit scoring works for full info.

  • What’s the difference between a secured and unsecured loan?

    A secured loan is where you put up some kind of security – such as your home – when taking out the loan. This is why they're often known as homeowner loans - if you don't have a home to put up as security to back the loan, you won't be eligible to get one. They can be easier to get than unsecured loans (where you don’t have to put up an asset as collateral), but are much riskier for the customer. This is because the lender could end up repossessing the asset in the event that you can’t pay back the loan.

    Most high-street personal loans and all the best buy loans we list on our How to get a personal loan guide are unsecured. 

  • How much can I borrow?

    When it comes to personal loans, lenders will typically offer loans of between £1,000 and £25,000, though some will offer as high as £50,000.

    The amount you can borrow will depend on a number of factors, including your income and employment status, your outgoings and whether you have any other outstanding debts. 

  • How long can I take out a loan for?

    The term of a loan dictates the length of time you have to pay the money back. Term lengths differ between lenders, but generally you can get a loans from between one and seven years. Some lenders also offer loans with longer terms, typically when the loan amount is very high.

     

  • What does APR mean?

    APR stands for ‘annual percentage rate’, and is is used by lenders to tell you the cost of borrowing.

    Where personal are shown as having a 'representative APR', it means only 51% of successful applicants must be given the stated rate. The other 49% could get a different rate (usually higher) – and some people will be rejected altogether.

    Lenders must tell you what the APR is before you sign a credit agreement. Read more about how interest rates work.

  • What if I have a bad credit score?

    Having a bad credit score usually means you've not managed credit well in the past (or that you've had very little credit before). 

    It could be that you have a history of missing payments, for example. And this is likely to mean your chances of getting approved for a loan are low. 

    And if you've no credit history at all – perhaps you’ve never borrowed – you could also find it difficult to get approved, as lenders will have no idea whether or not you’ll pay them back. It's like someone you don't know asking to borrow cash.

    There are ways to improve your credit history, or build it from scratch. Read more on how to boost your creditworthiness.

     

  • What happens if I miss a loan repayment?

    If you miss a loan repayment, you could be charged extra interest or fees by your lender which will increase the overall cost of borrowing. If you continue to miss repayments your lender will report it to credit referencing agencies and it will go on your credit file for six years, potentially impacting your chances of being accepted for other credit in that time (such as credit cards, other loans or mortgages).

    If you have a secured loan, continued missed payments could put assets such as your house at risk.

  • What happens if I'm rejected for a loan?

    You could get rejected for a loan for a number of reasons – it’s a murky business as lenders are not required to tell you why they've decided to turn you down. It could be down to you having a bad credit history, or if they think you'll be risky to lend to.

    Unfortunately, if you're rejected for a loan this will usually have an impact on your credit score – especially if you make multiple applications in a short space of time. That’s why we suggest using our Eligibility Calculator to check your chances of being accepted for personal loans from a wide array of lenders, without endangering your credit score.

  • What should I do if I need help to pay my loan?

    The first thing to do is contact your lender and explain the situation, as they might agree to pause your repayments or reduce the amount you owe. This is not guaranteed however – see our Debt help guide with your full options when struggling to repay debts, including ways to make your debt cheaper and free debt help services and charities if you need extra help. 

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This page is updated by:
Chris Collier – Assistant Editor – Money Products
Updated 25 July 2024