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

A standard MoneySaving rule of thumb is always pay off any debts before stashing any money in savings (read Pay off Debts with Savings ). In general, this is true with loans too, though due to the repayment penalties you may be financially better off by sticking it in a high interest account and drip-feeding loan payments out of there. So if the 'total repayment' figure of your loan is £5,000, yet to keep repaying it each month costs £5,100 in total, you only gain £100 by paying it off now. Stashing the loan repayments in a top savings account could earn you more (see Top Savings for the top picks). However, if in doubt of the calculations, always err on the side of clearing your debts.

Can I cut my loan costs even further?

You may be able to if you have a relatively small loan. Credit cards are a much cheaper way to borrow than loans; short-ish term borrowing at an equivalent 2%ish APR is possible. Yet if you already have a loan, shifting it to a credit card isn't an easy operation. It is possible, although tricky, to do it though. Only attempt it if you've got a good credit score and, more importantly, are very money-savvy. You can find full details in the Money Transfers guide.

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

Once you've applied for the loan, it's already marked as a 'hard search' on your credit report. So assuming you applied for the cheapest loan for you, then there's no point in not accepting that cash because it's not the money you need. The answer's relatively simple – just apply for another loan to fill the gap. If you haven't been turned down due to a credit score issue, this isn't likely to be too difficult. Just ensure both loans are still saving you money. If not, use the first to partially pay off the second – every little helps!

What will happen if UK interest rates change?

Almost every personal loan is at a fixed rate, so the rate and repayments you are given at the outset are fixed over the life of the loan, regardless of what happens to the base rate. Thus there's no impact whatsoever, whether rates rise or fall. But a change in the base rate will affect those looking to get a new loan, although it's not an exact relationship. As loans are borrowed over the long term, the rates lenders set depend more on the City's predictions of long-term interest rates rather than the actual UK base rate.

How quickly will I get the money?

That depends on the lender. There are some which will give you the cash instantly (or at least on the same day) if they accept you.

Cut existing loan costs

Free calculator shows if you'll save by switching loans

Helen Saxon

Updated 2 August 2022

Loan rates are near record lows right now, so if you took out a loan with a high APR in the past, you may now be able to save by getting a new loan to pay it off. This guide will show you how to find the best new deal, and features a unique loan-switching calculator so you can see if you'll save by switching.

Please note: This article is about unsecured loans, 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.

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Here we'll take you through the three key steps to calculate how much you could save by effectively switching loans – using a new, cheaper loan to repay your existing, more costly one.

Step 1: Find out your settlement figure

Before checking if you can save, you'll need to know the following information:

How much it would cost to pay off your loan right now
What your exact monthly payments are
How long your loan has left to go

The first is how much you'd need to borrow on a new loan to clear the existing one. It's the full debt plus any early settlement penalty charge (the maximum fee is two months' interest). This is called the settlement figure – you'll usually need to call your lender to get this.

Step 2: Find YOUR new top loan rate

Loans Eligibility Calculator

See which loans you've the best chance of getting, in your own personal best-buy table.

Usually, applying is the only way to know if you'll be accepted for a loan. Yet that marks your credit file, affecting your ability to get future credit. To help, our tool uses a 'soft search' to find your chances of acceptance before applying.

Check your chance of acceptance

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.

Though, beware, all the top loans compared below and most in the eligibility checker are representative rates (some providers show guaranteed rates – we're working on adding more). 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.

Under £3,000: from 9.9% APR
£3,000 - £4,999: from 8% APR
£5,000 - £7,499: from 3.7% APR
£7,500 - £15,000: from 2.7% APR

£15,001 - £20,000: from 2.8% APR
£20,001 - £25,000: from 2.8% APR
Over £25,000: from 3.3% APR

Cheapest loans under £3,000

As we warn above, while you should only borrow what you NEED, a peculiar quirk means you can sometimes pay less by getting a slightly bigger loan. Rates of loans under £3,000 are the most expensive, so always check if it's actually cheaper to borrow slightly more.

Specialist money transfer credit cards are also far cheaper than the loans below, if you can repay the full balance over 12-18 months.

Cheapest loans £1,000 - £1,999

LENDER	RATE (1-5 years or stated)	CHECK ELIGIBILITY + APPLY
Important. Specialist money transfer credit cards are far cheaper than the loans below.
Barclays	'From 5.9%' Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility (apply via eligibility link)
Novuna Personal Finance	9.9% rep APR (2-5 years)	Check eligibility
Novuna Personal Finance	9.9% rep APR (2-5 years)	Apply*
AIB (NI)	12.3% rep APR	Newbies must apply by phone (not in eligibility calc)
M&S Bank	12.9% rep APR (1-7 years)	Check eligibility
M&S Bank	12.9% rep APR (1-7 years)	Apply*
AA	13.4% rep APR (AA members) + claim a £30 voucher 13.5% rep APR (non-members) + claim a £30 voucher	Check eligibility
AA		Apply*

See all official APR examples.

Cheapest loans £2,000 - £2,999

LENDER	RATE (1-5 years or stated)	CHECK ELIGIBILITY + APPLY
Important. Specialist money transfer credit cards are far cheaper than the loans below.
Barclays	'From 5.9%' Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility (apply via eligibility link)
Novuna Personal Finance	9.9% rep APR (2-5 years)	Check eligibility
Novuna Personal Finance	9.9% rep APR (2-5 years)	Apply*
Zopa	'From 12.4%' Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility (apply via eligibility link)
AIB (NI)	12.3% rep APR	Newbies must apply by phone (not in eligibility calc)
M&S Bank	12.9% rep APR (1-7 years)	Check eligibility
M&S Bank	12.9% rep APR (1-7 years)	Apply*

See all official APR examples.

Cheapest loans £3,000 - £4,999

LENDER	RATE (1-5 years or stated)	CHECK ELIGIBILITY + APPLY
Important. Specialist money transfer credit cards are far cheaper than the loans below, provided you can get a credit limit big enough.
Ratesetter	'From 6.9%' (on £4,000-£4,999) Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility (apply via eligibility link)
Finble	8.1% rep APR (1-7 years)	Check eligibility (not available direct)
M&S Bank	8.1% rep APR (1-7 years)	Check eligibility
M&S Bank	8.1% rep APR (1-7 years)	Apply*
AA	8.1% rep APR (AA members) + claim a £30 voucher 8.2% rep APR (non-members) + claim a £30 voucher	Check eligibility
AA		Apply*
Novuna Personal Finance	8.2% rep APR (2-5 years)	Check eligibility
Novuna Personal Finance	8.2% rep APR (2-5 years)	Apply*

See all official APR examples.

Cheapest loans £5,000 - £7,499

LENDER	RATE (1-5 years or stated)	CHECK ELIGIBILITY + APPLY
M&S Bank	3.7% rep APR	Check eligibility
M&S Bank	3.7% rep APR	Apply*
Novuna Personal Finance	3.7% rep APR (2-5 years)	Check eligibility
Novuna Personal Finance	3.7% rep APR (2-5 years)	Apply*
Sainsbury's Bank	3.7% rep APR (Nectar cardholders) 3.8% rep APR (1-3 years)	Check eligibility
Sainsbury's Bank	3.7% rep APR (Nectar cardholders) 3.8% rep APR (1-3 years)	Apply*
Cahoot	3.8% rep APR	Check eligibility
Cahoot	3.8% rep APR	Apply*
RateSetter	'From 3.9%' Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility (apply via eligibility link)

See all official APR examples.

Cheapest loans £7,500 - £15,000

LENDER	RATE (1-5 years or stated)	CHECK ELIGIBILITY + APPLY
Finble	2.7% rep APR (1-7 years)	Check eligibility (not available direct)
RateSetter	'From 2.8%' Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility (apply via eligibility link)
M&S Bank	2.8% rep APR	Check eligibility
M&S Bank	2.8% rep APR	Apply*
Cahoot	2.9% rep APR	Check eligibility
Cahoot	2.9% rep APR	Apply*
Santander	3.1% rep APR	Check eligibility
Santander	3.1% rep APR	Apply
AA	3.1% rep APR (AA members, 1-7 years) + claim a £30 voucher 3.2% rep APR (non-members, 1-7 years) + claim a £30 voucher	Check eligibility
AA		Apply*

See all official APR examples.

Cheapest loans £15,001 - £20,000

LENDER	RATE (1-5 years or stated)	CHECK ELIGIBILITY + APPLY
RateSetter	'From 2.7%' Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility (apply via eligibility link)
Finble	2.8% rep APR (1-7 years)	Check eligibility (not available direct)
Cahoot	2.9% rep APR	Check eligibility
Cahoot	2.9% rep APR	Apply*
AA	2.9% rep APR (AA members, 1-7 years) + claim a £30 voucher 3% rep APR (non-members, 1-7 years) + claim a £30 voucher	Check eligibility
AA		Apply*
Post Office	3% rep APR (1-7 years)	Check eligibility
Post Office	3% rep APR (1-7 years)	Apply*

See all official APR examples.

Cheapest loans £20,001 - £25,000

LENDER	RATE (1-5 years or stated)	CHECK ELIGIBILITY + APPLY
RateSetter	'From 2.8%' Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility (apply via eligibility link)
Finble	2.8% rep APR (1-7 years)	Check eligibility (not available direct)
AA	3.1% rep APR (AA members, 1-7 years) + claim a £30 voucher 3.2% rep APR (non-members, 1-7 years) + claim a £30 voucher	Check eligibility
AA		Apply*
Post Office	3.2% rep APR (1-7 years)	Check eligibility
Post Office	3.2% rep APR (1-7 years)	Apply*
Tesco	3.2% rep APR	Check eligibility
Tesco	3.2% rep APR	Apply*

See all official APR examples.

Cheapest loans over £25,000

Important. Certain lenders offer personal loans up to £50,000, though it's a huge commitment, so think very carefully before getting such a large amount. Be VERY sure you can repay it.

If you do plan to borrow, first check with your own bank, as cheap rates for such large borrowing are often for existing customers only. If your bank can't help, next look at the cheapest open market rates.

Cheapest loans over £25,000

LENDER	RATE (1-5 years or stated)	APPLY
You need to be an existing customer to qualify for these loans
First Direct	£25k-£30k: 3.3% rep APR (1-8 years)	Apply (not in our eligibility calculator)
First Direct	£30k-£50k: 6.7% rep APR (1-8 years)	Apply (not in our eligibility calculator)
NatWest/RBS/Ulster Bank	£25k-£35k: 5.6% rep APR (2-8 years)	Check eligibility (NatWest and RBS)
NatWest/RBS/Ulster Bank	£35k-£50k: 6.9% rep APR (1-8 years)	Apply to NatWest, RBS or Ulster Bank
The top open market loans
RateSetter	£25k-£30k: 'from 2.8%' Use our eligibility calc to check if you can get these personalised, 'guaranteed' rates	Check eligibility
Sainsbury's Bank	£25k-£40k: 5.7% rep APR (2-5 years), 6.2% rep APR (6-7 years) Must have a Nectar card, not open to anyone self-employed	Check eligibility
Sainsbury's Bank		Apply*
Novuna Personal Finance	£25k-£35k: 5.9% rep APR (4-5 years)	Check eligibility
Novuna Personal Finance	£25k-£35k: 5.9% rep APR (4-5 years)	Apply*
Tesco Bank	£25k-£35k: 6% rep APR (1-3 years), 6.6% rep APR (4-5 years), 7.9% rep APR (6-7 years)	Check eligibility
Tesco Bank		Apply*
Finble	£25k-£35k: 6.3% rep APR (1-7 years)	Check eligibility (not available direct)

See all official APR examples.

If the above doesn't work, you could combine smaller personal loans or remortgage, though that usually means extending the term, more interest and securing the debt on your home.

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).

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For all the latest deals, guides and loopholes simply sign up today – it's spam-free!

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FAQs Privacy Past Emails Unsubscribe

Q&A: Cutting loan costs

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

A standard MoneySaving rule of thumb is always pay off any debts before stashing any money in savings (read Pay off Debts with Savings). In general, this is true with loans too, though due to the repayment penalties you may be financially better off by sticking it in a high interest account and drip-feeding loan payments out of there.

So if the 'total repayment' figure of your loan is £5,000, yet to keep repaying it each month costs £5,100 in total, you only gain £100 by paying it off now. Stashing the loan repayments in a top savings account could earn you more (see Top Savings for the top picks). However, if in doubt of the calculations, always err on the side of clearing your debts.
Can I cut my loan costs even further?

You may be able to if you have a relatively small loan.

Credit cards are a much cheaper way to borrow than loans; short-ish term borrowing at an equivalent 2%ish APR is possible. Yet if you already have a loan, shifting it to a credit card isn't an easy operation. It is possible, although tricky, to do it though.

Only attempt it if you've got a good credit score and, more importantly, are very money-savvy. You can find full details in the Money Transfers guide.
What if I need to borrow more than they'll lend?

Once you've applied for the loan, it's already marked as a 'hard search' on your credit report. So assuming you applied for the cheapest loan for you, then there's no point in not accepting that cash because it's not the money you need. The answer's relatively simple – just apply for another loan to fill the gap. If you haven't been turned down due to a credit score issue, this isn't likely to be too difficult.

Just ensure both loans are still saving you money. If not, use the first to partially pay off the second – every little helps!
What will happen if UK interest rates change?

Almost every personal loan is at a fixed rate, so the rate and repayments you are given at the outset are fixed over the life of the loan, regardless of what happens to the base rate. Thus there's no impact whatsoever, whether rates rise or fall.

But a change in the base rate will affect those looking to get a new loan, although it's not an exact relationship. As loans are borrowed over the long term, the rates lenders set depend more on the City's predictions of long-term interest rates rather than the actual UK base rate.
How quickly will I get the money?

That depends on the lender. There are some which will give you the cash instantly (or at least on the same day) if they accept you.

MSE Forum

Have your say in our forum!

Cut existing loan costs

Spotted out of date info/broken links? Email: brokenlink@moneysavingexpert.com

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In this guide

In this guide

Money transfer credit cards

Cheap personal loans

Repay debts or save?

Cut existing loan costs

Free calculator shows if you'll save by switching loans

In this guide

In this guide

Best-buy personal loans

Step 1: Find out your settlement figure

Step 2: Find YOUR new top loan rate

Cheapest loans under £3,000

Cheapest loans £1,000 - £1,999

Cheapest loans £2,000 - £2,999

Cheapest loans £3,000 - £4,999

Cheapest loans £3,000 - £4,999

Cheapest loans £5,000 - £7,499

Cheapest loans £5,000 - £7,499

Cheapest loans £7,500 - £15,000

Cheapest loans £7,500 - £15,000

Cheapest loans £15,001 - £20,000

Cheapest loans £15,001 - £20,000

Cheapest loans £20,001 - £25,000

Cheapest loans £20,001 - £25,000

Cheapest loans over £25,000

Cheapest loans over £25,000

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

Q&A: Cutting loan costs

Share this guide

Have your say in our forum!

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