If you want to borrow money, it’s useful to compare loans and attempt to find the best personal loan for your situation. We’ve put some of the UK’s lenders through their paces to help you do just that.
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The best personal loans allow you to borrow a sum of money over an agreed period at the lowest interest rate you can get. You then repay this amount, plus interest, usually in monthly instalments until the debt is paid off.
The best personal loan for your situation depends on:
The best loans will also usually have straightforward application processes, plus flexibility around the amount you can borrow, the terms and the repayment options.
To help you compare the best personal loan deals, lenders need to display the cost of a loan as a percentage, known as the annual percentage rate (APR). This represents the yearly cost of borrowing money, taking into account the interest rate and any standard fees.
It’s important to consider the APR alongside other features of a loan to decide if it’s right for you. However, be aware that your personal APR could be higher, lower or the same as the advertised rate. The advertised APR – known as the representative APR – is the rate that at least 51% of applicants will receive. This means that 49% of applicants could receive a different rate.
Checking your eligibility using a loan comparison service can show you the loan deals you’re likely to qualify for and the loan rate you’re likely to receive. You’ll need to enter a few details such as your income and employment status to get a personalised quote.
You can also check your credit score before applying for a loan to get an idea of how a lender may view your application. If you make multiple credit applications in a short space of time, you can damage your credit score. This means it’s a good idea to only apply for loans you’re confident of getting – checking your credit score can help you to work this out.
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