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Cheap Personal Loans

Borrow at 2.7% for £7.5k+

Martin

Updated Daily

Man in a percentage signFor those who need to borrow, a price war between providers means you can now get a loan for as little as 2.7% a year. But be careful before picking one – even the best deals have more tricks than Dynamo's sleeve.

Borrowing should always be budgeted for, and carefully planned, so you know whether you can afford the repayments. This is a step-by-step guide, with daily-updated best buys, a unique calculator to pare your costs to the bone and an eligibility calculator that'll tell you which

What is a personal loan?

Personal loans, also known as unsecured loans, are where you borrow a sum of money from a lender, and agree to pay it back over a set time period in fixed monthly repayments.

The lender will charge you interest as its fee to lend money to you, so you repay the amount you borrowed plus interest. The advantage is you get cash upfront, but can spread the cost of a purchase over several months or years.

This guide details the cheapest personal loans, but also addresses whether other finance options, like credit cards, might be cheaper for you. Plus, we've our clever Loans Eligibility Calculator, which can tell you which lenders are likely to accept you before you apply.

The 7 need-to-knows

Get taking out a loan wrong, and it can cost you large. So here's what you need to know about this type of borrowing...

  • Only borrow if it's needed, planned and you've budgeted to pay it back. Even then, borrow as little as possible and repay as quickly as possible

  • 'Credit card loans' can be cheaper if you're borrowing less than £5,000 – though you'll need to be disciplined to pay it back

  • Use our eligibility calculator to find which loans you're most likely to get

  • Credit history's important, but income guides how much you can borrow

  • 'Representative' APRs mean you might not get the advertised interest rate (especially if you've a poorer credit score)

  • Bizarrely it sometimes costs less to borrow more – but be careful

  • You can usually overpay or settle your loan early for free

Best Buys Personal loans

If you're looking for a loan, check out the best buy rates below. We list loans by 'bands' as the rate you could get differs depending on how much you want to borrow. Plus, if you want to find out which loans you'll get, without applying, use our eligibility calculator to see your chances.

The best buys are below, but there's the chance to undercut some of these rates by 0.5 percentage points if you're an Nationwide current account customer (or you successfully apply for one of their accounts). Read a full Nationwide how-to.

Cheapest loans under £5,000

Cheapest standard rate Lender and representative APRs (all rates over 1-5 years unless stated)
See all official APR examples
Check which loan you can get before you apply
Eligibility Calc. (MSE's free tool)

Usually the only way to know if you'll get a loan is to apply, which marks your credit file. Our Eligibility Calculator does a soft search to find which loans you'll get without harming your creditworthiness.

Cheapest loans for
£1,000 - £1,999

Want to find out if you'll get these loans? Use the Eligibility Calculator.

A few specialist credit cards can approximate loans and are far cheaper than the loans below, full step-by-step in Money Transfers.
RateSetter* 6.7% rep APR
Zopa* 9.5% rep APR (1 year term)
Zopa* 9.9% rep APR (2-5 years)
Asda Money 9.9% rep APR (will search various lenders and tell you the rate you'll get before you apply, not in eligibility calc)
Cheapest loans for
£2,000 - £2,999

Want to find out if you'll get these loans? Use the Eligibility Calculator.

A few specialist credit cards can approximate loans and are far cheaper than the loans below, full step-by-step in Money Transfers.
RateSetter* 6.7% rep APR
Zopa* 6.9% to 7.9% rep APR (depending on amount & term)

Ikano Bank 7.8% rep APR (not in eligibility calc)

Cheapest loans for
£3,000 - £4,999

Want to find out if you'll get these loans? Use the Eligibility Calculator.

Zopa* 5% to 6.9% rep APR (depending on amount & term)
RateSetter* 6.7% rep APR
Admiral* 6.7% rep APR

Ikano Bank 7.7% rep APR (not in eligibility calc)

Cheapest loans from £5,000 to £15,000

Cheapest standard rate Lender and Representative APRs (all rates over 1-5 years unless stated)
See all official APR examples
Check which loan you can get before you apply
Eligibility Calc (MSE's free tool)

Usually the only way to know if you'll get a loan is to apply, which marks your credit file. Our Eligibility Calculator does a soft search to find which loans you'll get without harming your creditworthiness.

Cheapest loans for
£5,000 - £7,499

Want to find out if you'll get these loans? Use the Eligibility Calculator.

Sainsbury's Bank* 3.3% rep APR (Nectar cardholders only, 1-3 years)
Sainsbury's Bank* 3.4% rep APR (Nectar cardholders only, 37mths-5 years)
Admiral* 3.4% rep APR
Zopa* 3.5% rep APR
Hitachi* 3.5% rep APR (2-5 years)

M&S Bank* 3.6% rep APR (1-7 years)

John Lewis Finance* 3.6% rep APR
Cheapest loans for
£7,500 - £15,000

Want to find out if you'll get these loans? Use the Eligibility Calculator.

Sainsbury's Bank* 2.7% rep APR (Nectar cardholders only, 1-3 years)
Sainsbury's Bank* 2.8% rep APR (Nectar cardholders only, 37mths-5 years)
Cahoot* 2.8% rep APR
M&S Bank* 2.8% rep APR (1-3 years)
M&S Bank* 2.9% rep APR (37 months - 7 years)

Yorkshire* / Clydesdale* 2.9% rep APR (1-7 years)

John Lewis Finance* 2.9% rep APR
Tesco Bank* 3% rep APR

Cheapest loans over £15,000

Cheapest standard rate Lender and Representative APRs (all rates over 1-5 years unless stated)
See all official APR examples
Check which loan you can get before you apply
Eligibility Calc (MSE's free tool)

Usually the only way to know if you'll get a loan is to apply, which marks your credit file. Our Eligibility Calculator does a soft search to find which loans you'll get without harming your creditworthiness.

Cheapest loans for
£15,001 - £19,999

Want to find out if you'll get these loans? Use the Eligibility Calculator.

Cahoot* 2.8% rep APR

M&S Bank* 2.8% rep APR (1-3 years)
M&S Bank* 2.9% rep APR (37 months - 7 years)

Sainsbury's Bank* 2.9% rep APR (Nectar cardholders only, 2-3 years)
Sainsbury's Bank* 3% rep APR (Nectar cardholders only, 37 months - 7 years)

Yorkshire* / Clydesdale* 3% rep APR (1-7 years)

Tesco Bank* 3% rep APR
The AA* 3% rep APR (AA members only, 1-7 years)
The AA* 3.1% rep APR (1-7 years)
Cheapest loans for
£20,000 - £25,000

Want to find out if you'll get these loans? Use the Eligibility Calculator.

Yorkshire* / Clydesdale* 3% rep APR (1-7 years)

Tesco Bank* 3% rep APR
Sainsbury's Bank* 3% rep APR (Nectar cardholders only, 2-3 years)
Sainsbury's Bank* 3.1% rep APR (Nectar cardholders only, 37mths-7 years)
The AA* 3% rep APR (AA members only, 1-7 years)
The AA* 3.1% rep APR (1-7 years)
Post Office* 3.1% rep APR (1-7 years)
Hitachi* 3.3% rep APR (2-5 years)
Cheapest loans
over £25,000

Want to find out if you'll get these loans? Use the Eligibility Calculator.

Must have a First Direct current account First Direct 3.3% rep APR (loans between £25,000 and £30,000, 1-7 years, not in eligibility calc)
Must have a First Direct current account First Direct 6.7% rep APR (loans between £30,001 and £50,000, 1-7 years, not in eligibility calc)
RateSetter* 6.7% rep APR
Tesco Bank* 6.8% rep APR

Yorkshire* / Clydesdale* 6.9% rep APR

Sainsbury's Bank* 6.9% rep APR (Nectar cardholders only, 2-3 years)

First Direct now offers personal loans to its current account customers up to £50,000 and Sainsbury's Bank offers loans up to £40,000. RateSetter, Tesco Bank, Yorkshire Bank and Clydesdale offer up to £35,000. Though be very careful in getting a personal loan for such a large amount as it's a huge commitment.

If you can't get this, you could combine loans, or remortgage, though that often means extending the term, more interest and securing the debt on your house.

Special trick for Nationwide customers – 2.2% loans?

If you hold a current account (or successfully apply for one) with Nationwide, it promises to undercut the best loan offer you get by 0.5 percentage points – as long as you're accepted for its own loan. This means, for example, a 2.7% loan (the current best buy) could become 2.2%...

Full details of how the Nationwide loan trick works

Cashback sites may pay you for signing up

As an extra boon, members of specialist cashback websites can be paid when they sign up to some financial products. Do check that it's exactly the same deal though, as terms can be different. And remember the cashback is never 100% guaranteed until it's in your account. 

Full help to take advantage of this and pros & cons in our Top Cashback Sites guide.

The Loan Calculator

We've designed a unique calculator to help you work out the cost of a loan, plus whether you can save by switching. Unfortunately, this does not work on a mobile so email the guide to yourself so you can have a look at it on your desktop.

Go to the personal loans calculator

The Loan Calculator

We've designed a unique calculator to help you work out the cost of a loan, plus whether you can save by switching.

Personal Loans Calculator

Pick your question...
How much do you want to borrow? £

What's the annual interest rate (APR)? % This is the cost of your loan. To help you calculate, best buy APRs for common loan amounts include:
£1,000-£1,999: 8% to 20%
£2,000-£2,999: 8% to 19%
£3,000-£4,999: 8% to 13%
£5,000-£7,499: 3.6% to 9%
£7,500-£15,000: 2.9% to 7%
£15,001-£25,000: 3.2% to 8%


How long do you want to borrow for? months You can usually choose to borrow over 12 to 60 months (1 to 5 years). If you choose a shorter loan, you'll have a higher monthly payment, but will pay less in interest. A longer loan generally means a lower monthly repayment, but you'll pay more in interest as you're borrowing over a longer period of time.





Just want to see the best buys?

Want to complain about your loan provider?

If your loan provider has charged you the wrong amount, taken the wrong amount in payment, or its service has been atrocious, then you don't have to suffer in silence. It's always worth trying to call your lender first to see if it can help, but if not...

Free tool if you're having problems

This tool helps you draft your complaint and manage it too. It's totally free, and offered by a firm called Resolver, which we like so much we work with it to help people get complaints justice.

If the complaint isn't resolved, you can use Resolver to escalate it to the free Financial Ombudsman Service.

Personal Loans Q&A

  • Are peer-to-peer loans any good?

  • Should I consider getting a loan from a credit union?

  • I can get a loan from my employer, is it a good idea?

  • Is there any point getting PPI with a loan?

  • Should I get a consolidation loan?

  • What's the difference between secured and unsecured loans?

  • What is a homeowner loan?

  • Are you eligible for Government help?

  • What if I need to borrow more than they'll lend?

  • What will happen if UK interest rates change?

  • How quickly will I get the money?

  • Are car loans straight from the dealer worth it?

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