See your personalised rates
- Find lenders that can approve you
- Good and bad credit histories accepted
- Fast funding with no hidden costs
Please note: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.
Late repayments can cause you serious money problems. See our debt help guides.
Market rates vary over time, but right now, a loan that comes with an annual percentage rate (APR) below 10% would broadly be considered “low rate”. It works like any other personal loan: It’s money you borrow to cover an expense, which you pay back plus interest and fees. The main difference is that they tend to cost less than your average personal loan, thanks to the low interest rate.
Rates will vary depending on the loan amount and term you’re after — lenders can’t make as much profit as they might like from, say, a £2,000 loan over one year with an APR of 4%.
To qualify for a low-interest loan from most traditional lenders, you typically need to have a high credit score and a strong financial history.
Doesn’t sound like you? You still have low-interest options. Those with a less than perfect credit score might want to look at loans secured with collateral or borrow from credit unions or peer-to-peer lenders, which tend to offer lower rates than other direct lenders.
You might think that all you need to get that 3% APR is a reasonably good credit score, but the truth is that very few people can qualify for a lender’s absolute lowest rate.
Lenders only offer these low rates to ideal candidates: People who borrow over a certain amount, have a six-figure income and almost no debt. In other words, the kind of person that probably doesn’t need a loan. The average interest rate for people with excellent credit is actually just around 9%.
If you find a personal loan you’re eligible for, you can either apply online, in person or over the phone, depending on your lender. Many online lenders have pre-qualification options, which give you an estimate of what type of interest rates you might be eligible for without a hard credit check.
After you submit your application, an underwriter (or underwriting software) reviews your file and pulls a hard credit check — which will cause a temporary dip in your credit score. At this point you might be asked to submit additional documentation like bank statements, tax forms or pay stubs.
If you’re approved for an online personal loan, the money is transferred into your bank account electronically. You then have to make repayments on a monthly basis until your loan is paid off.
Interest is important , but it’s not the only thing that makes a loan competitive. Compare these other features when looking for a personal loan:
In your search for low-interest personal loans you’ll come across these options:
Chris Lilly is a publisher at finder.com. He's a specialist in credit-based products including business and personal loans, mortgages and credit cards, and is passionate about helping UK consumers make informed decisions about their borrowing. In his spare time Chris likes forcing his kids to exercise more.
Learn more about how Open Banking works and how it could benefit you.
These awards recognise innovation in the areas of credit cards, loans, mortgages and BNPL. We reveal this year’s winners.
Learn more about the best and cheapest ways to borrow money.
Find the most competitive loan rates in the UK for high credit scores.
Learn more about what you can do if you’ve been refused a loan with a 999 credit score.
Find out how to get a £7,000 personal loan and how much it could cost you.
These awards recognise innovation in the areas of credit cards, loans, mortgages and BNPL. We reveal this year’s winners.
Debt consolidation can have a positive or negative impact on your credit score. Here’s how to make sure you don’t damage your record when consolidating debt.
Many Brits are saving more than ever during lockdown, so is now a good time to pay off your existing debts?
You’ll find customer satisfaction star ratings on some of our personal loans provider reviews. Here’s how we came up with them.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.