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The UK's cheapest personal loans: best buys

The UK's cheapest personal loans: best buys

Find out where you can borrow between £7,500 and £15,000 from as little as 5.9% with our best buy personal loan round up.

lovemoney staff

Banking and Borrowing

lovemoney staff
Updated on 8 April 2024

Personal loans are normally offered over one to five years and aren’t secured against your home or any other asset.

It's quite a flexible market and you can typically choose between a small loan of £5,000-£7,499, a medium loan of £7,500-£15,000 or a large loan of more than £15,000.

The cheapest rates can usually be found in the medium range.

Will you get the advertised rate?

By law, only 51% of accepted applicants have to be offered the Representative APR on a personal loan or credit card.

If you have a poor credit history or have never borrowed before, you may be offered a higher rate. Unfortunately, you will only be told this after going through the whole application process and a credit check.

Medium loans (£7,500-£15,000)

Here are the lowest rates when borrowing £10,000 over three years.

Loan

 

Representative APR

Monthly repayment

Total amount repayable

TSB   5.9% £303.07 £10,910.52
Sainsbury's Bank Personal Loan *   6.0% £303.50 £10,926
Tesco Bank Personal Loan **   6.1% £303.92 £10,941.12
Santander Personal Loan   6.2% £304.36 £10,956.96

*Must be existing Nectar Card holder
**Must be existing Clubcard holder

Large loans (more than £15,000)

If you need to borrow more the rates are still competitive. 

Here’s what you can get when borrowing £17,500 over three years.

Loan

Representative APR

Monthly repayment

Total amount repayable

TSB 5.9% £530.37 £19,093.32
Sainsbury's Bank Personal Loan *  
6.0% £531.12 £19,120.32
Tesco Bank Personal Loan ** 6.1% £531.87 £19,147.32
M&S Bank 6.2% £532.63 £19,174.68
Santander Personal Loan 6.3% £533.38 £19,201.68

*Must be existing Nectar Card holder
**Must be existing Clubcard holder

Small loans (£5,000-£7,499)

The smallest loans on offer, which range from between £5,000 and £7,499, are also the most expensive. 

Here are the best buy personal loans, using the example of £5,000 repaid over three years.

Loan

Representative APR

Monthly repayment

Total amount repayable

Tesco Bank Personal Loan * 7.3% £154.53 £5,563.08
Santander Personal Loan 7.3% £154.54 £5,563.44
Sainsbury’s Bank Personal Loan ** 7.4% £154.75 £5.571
*Must be existing Clubcard holder
**Must be existing Nectar Card holder

Personal loan alternatives 

It’s also possible that you may be able to borrow even more cheaply.

If you have an excellent credit rating, you may be able to get a 0% new purchase credit card.

With one of these cards, you can make a big purchase and not pay any interest on the resulting debt for two years or more.

For a full rundown, check out the best 0% purchase credit cards.

Just remember that you may be offered a fairly low credit limit – if you’re only offered a £2,000 credit limit, you may want to go for a personal loan where you can borrow more.

Do you need to borrow?

Whatever kind of loan you go for, first ask yourself first whether you actually need to borrow the money.

Even if you’re paying a super-low interest rate, you’re still giving up money on interest payments, which you’ll never see again.

The prudent approach is to cut your spending and build up your savings if you can. If you follow that approach, you’ll be richer in the long run.

But if you’re determined to borrow, a personal loan may well be the best option for you.

*This article contains affiliate links, which means we may receive a commission on any sales of products or services we write about. This article was written completely independently.

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