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Cut Existing Loan Costs

Unique free calc shows if you'll save

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Helen S

Updated May 2017

Cut the cost of existing loansWant to cut the cost of your current loan? With the current crop of record-low loan rates, you might be able to, but it's often difficult to be able to tell if you can save.

This cost-cutting guide will show you how to find the best new deal, and features a unique loan switching calculator so you can see if you can cut your costs.

Please note, this article is about unsecured loans, ie, the type sold by most high-street lenders. The issues surrounding secured loans (where your home may be at risk) are even more complex. So this article is a secured loan-free zone.

This is a step-by-step guide to see if you can cut the cost of your existing loans. Here's how to do it...

Step 1: Call your current lender for a settlement figure

Before finding out if you can save, you'll need to call your existing lender to ask it a couple of questions. This is the big one:

How much would it cost me to pay off my loan right now?

This is what you need to borrow on your new loan. It's the full debt plus early settlement charge (if any); the maximum fee is two months' interest. This is called the settlement figure.

Unless you already know, it's also worth asking what your exact monthly repayments are, and how long the loan has to go (you'll need both pieces of info for the calculator below).

Quick question

What early settlement charges might I have to pay?

Step 2: Find YOUR new top loan rate

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 check if you'll get the loan before applying, use our free Loans Quick Eligibility Calc or our FULL Credit Club Loans Eligibility Calc (where you also get a free Credit & Affordability Score). They show your chances of getting most top loans without hitting your credit score.

Though, beware, all the top loans compared below and in the eligibility checker are representative rates. This means only 51% of those accepted actually need to be given these rates. Depending on your credit score, you may pay a lot more.

For full information about the current best deals, read the full Cheap Personal Loans guide.

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.
Hitachi* 7.9% rep APR (2-5 years)
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)
CU Loans* 12.9% rep APR for £1,500-£1,999 (will find if there's a credit union you're eligible for)
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.
Zopa* 6.9% to 7.9% rep APR (depending on amount & term)

Ikano Bank* 7.8% rep APR

Hitachi* 7.9% 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
£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)
Hitachi* 7.3% rep APR (2-5 years)

Ikano Bank* 7.7% rep APR

Admiral* 8.5% rep APR

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.

Tesco Bank 3.3% rep APR (not in eligibility calc)
Admiral* 3.4% rep APR
Hitachi* 3.4% rep APR (2-5 years)
Zopa* 3.6% rep APR
John Lewis Finance 3.6% rep APR (not in eligibility calc)
M&S Bank* 3.6% rep APR (1-7 years)
Cheapest loans for
£7,500 - £15,000

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

Zopa* 2.9% rep APR
John Lewis Finance 2.9% rep APR (not in eligibility calc)
The AA* 2.9% rep APR (AA members only)
The AA* 3% rep APR
M&S Bank* 3% rep APR (1-7 years)
Cahoot* 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.

The AA* 2.9% rep APR (AA members only, 1-7 years)
The AA* 3% rep APR (1-7 years)
Zopa* 3% rep APR
Post Office* 3% rep APR (1-7 years)
Cahoot* 3% rep APR
Tesco Bank* 3.1% rep APR
Cheapest loans for
£20,000 - £25,000

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

The AA* 2.9% rep APR (AA members only, 1-7 years)
The AA* 3% rep APR (1-7 years)
Zopa* 3% rep APR
Post Office* 3% rep APR (1-7 years)
Tesco Bank* 3.1% rep APR
TSB* 3.2% rep APR
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)
Tesco Bank* 6.7% rep APR (Clubcard cardholders only)
Tesco Bank* 6.9% rep APR

Yorkshire* / Clydesdale* 6.9% rep APR

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. 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.

Step 3: The BIG reveal - check if you can save

Plug the old and new loan details into our nifty loan switching calculator. If you can save, apply. If accepted, use the new loan to pay off the old one (note the calculator assumes you will borrow the new amount over the same remaining number of months).

The Loan Switching Calculator Is it worth switching loans?

YOUR CURRENT LOAN

YOUR NEW LOAN

Please insert values in every box.
Please make sure to only input numbers.
You will NOT save by switching
You can save by switching

Stick with your current deal and you will repay

Shift to the new deal and you will repay

Therefore you are

Q&A Cutting loan costs

  • If I come into a windfall, should I pay the loan off?

  • Can I cut my loan costs even further?

  • 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?

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For all the latest deals, guides and loopholes - join the 12m who get it. Don't miss out