RAC personal loans review September 2020

As well as its famous roadside rescue service, the RAC offers personal loans of up to £25,000 with rates tailored to each borrower.

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RAC Personal Loans
RAC Personal Loan

RAC personal loans

  • Borrow from £1,000 to £25,000
  • Rates often lower than the banks
  • Check your eligibility without harming your credit score

Representative example: Borrow £7,500 over 5 years with representative APR 9.9% (fixed) and total payable £9,445.80 in monthly repayments of £157.43.

Like its arch-rival the AA, the RAC (which stands for the Royal Automobile Club) has diversified over the years from purely offering roadside assistance to becoming a fully-fledged financial services provider, with a focus on insurance products and personal loans.

RAC Loans is a trading name of RAC Financial Services Limited, which acts as a credit broker (not a direct lender) in partnership with Freedom Finance.

Interest rates are tailored to the individual borrower, which means that while a lender’s obliged by the Financial Conduct Authority (FCA) to declare the Representative APR of its loans, the reality is that many borrowers will receive a different rate. If you’re interested in a personal loan from the RAC, it offers an easy-to-use “soft search” facility, which can give you a clear idea of your chances of approval, plus a realistic estimate of the rate you’d be offered – all without affecting your credit score.

Key features of RAC personal loans at a glance

Whether you’re looking to fund a large purchase or consolidate debt, RAC offers competitive fixed-rate loans at personalised rates, and it’s quick and easy to apply online.

  • Borrow from £1,000-£25,000.
  • Borrow over terms of 1-7 years.
  • Quick access to funds.
  • Personalised quick quote with no impact on credit rating. Get a clear idea of your likelihood of approval and the rate you’d be offered.

Interest rates are fixed for the duration of your repayment period, although the rate you’re offered will depend on factors like the amount you apply for, the term of the loan, your credit rating and your income. It may differ from the advertised “Representative APR“.

What is APR?

If you’re comparing any credit-based products, it won’t be long before you’ll come across the Annual Percentage Rate (APR). This figure is designed to provide an annual summary of the cost of a loan. It takes into account both interest and any mandatory charges to be paid (for example an arrangement fee) over the duration of a loan.

All lenders must calculate the APR of their products in the same way, and must tell you the APR before you sign an agreement, so for consumers it can be a handy tool for comparison.

Bear in mind, however, that lenders are only obliged to award this rate to 51% of those who take out the loan – the other 49% could pay more. That’s why it’s often referred to as the representative APR.

Compare personal loans

Table: sorted by representative APR, promoted deals first
Name Product Total Payable Monthly Repayment Representative APR Link
Lending Works Personal Loan
Check eligibility
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 5.8% p.a. (fixed) with an application fee of £0.00. Representative APR 10.0% and total payable £11,543.40 in monthly repayments of £320.65.
Barclays Bank Existing Current Account Customer Barclayloan
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 5.5% p.a. (fixed). Representative APR 5.5% and total payable £10,848.60 in monthly repayments of £301.35.
Creation Financial Services Argos Unsecured Personal Loan
Creation Financial Services Argos Unsecured Personal Loan
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 9.9% p.a. (fixed). Representative APR 9.9% and total payable £11,527.92 in monthly repayments of £320.22.
Lloyds Bank Existing Customer Personal Loan
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.9% p.a. (fixed). Representative APR 3.9% and total payable £10,601.64 in monthly repayments of £294.49.
My Community Bank Personal Loan
Check eligibility
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 23.9% p.a. (fixed). Representative APR 23.9% and total payable £13,678.20 in monthly repayments of £379.95.
Zopa Personal Loan
Check eligibility
View details
Representative example: Borrow £10,000.00 over 5 years at a rate of 8.8% p.a. (fixed) with an application fee of £240.00. Representative APR 9.9% and total payable £12,602.87 in monthly repayments of £210.05.
Hitachi Personal Finance Hitachi Personal Loan
Check eligibility
View details
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.5% p.a. (fixed). Representative APR 3.5% and total payable £10,539.72 in monthly repayments of £292.77.
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Compare up to 4 providers

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.

Am I eligible for an RAC personal loan?

You should only apply for a RAC personal loan if you’re certain you can meet the repayment terms, and you meet the following criteria:

  • UK resident
  • Aged 18 years old or over.
  • Must have a personal bank account in the UK
  • Must have an annual income which you can prove

How can I apply?

RAC will offer you a quote via on online application which takes three minutes to complete. You’ll need to provide proof of the following:

  • your ID.
  • your address history for the past three years.
  • your current income and employment details.

Frequently asked questions

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

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