RAC

RAC personal loans review July 2019

As well as its famous roadside rescue service, the RAC offers personal loans of up to £35,000 with rates tailored to each borrower.

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). The loans themselves are provided by Shawbrook Bank.

Shawbrook is known for tailoring all its interest rates to the individual borrower, which means that while it’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-£35,000.
  • Borrow over terms of 1-7 years. Terms over 5 years are available for loans of more than £15,000.
  • 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.
  • Instant decision. The result of your application will be displayed on screen within seconds of your application being completed.
  • No set-up fees. You’ll pay no “administration” or “set up” fees to take out a loan.
  • Quick access to funds. RAC promises to have all approved funds to you within three days.
  • Fixed monthly repayments. Monthly repayments are fixed, meaning you’ll pay the same amount each month an you’ll know how much the loan is going to cost overall.
  • Repay part or all of your loan early at any time without penalty. There’s no charge for over paying or repaying your loan early in full, however as is standard for many loan providers, any sums repaid early may be subject to a further 58 days’ interest.

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

Comparison ordered by representative APR with affiliated products shown first. Rates updated 24 Jul 2019.
Name Product Total Payable Monthly Repayment Representative APR
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.
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.4% p.a. (fixed). Representative APR 3.4% and total payable £10,524.24 in monthly repayments of £292.34.
Representative example: Borrow £15,001.00 over 3 years at a rate of 3.1% p.a. (fixed). Representative APR 3.1% and total payable £15,718.32 in monthly repayments of £436.62.
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.4% p.a. (fixed). Representative APR 3.4% and total payable £10,524.24 in monthly repayments of £292.34.
Representative example: Borrow £10,000.00 over 3 years at a rate of 3.1% p.a. (fixed). Representative APR 3.1% and total payable £10,478.16 in monthly repayments of £291.06.
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.
Representative example: Borrow £10,000.00 over 3 years at a rate of 2.9% p.a. (fixed). Representative APR 2.9% and total payable £10,447.20 in monthly repayments of £290.20.

Compare up to 4 providers

Important information:
You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.

warning icon Warning: 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 for at least three years.
  • Aged 18 years old or over.
  • Must have a UK-based bank or building society account.
  • Must be employed, self-employed or retired with regular income of £15,000 a year.
  • You must hold a good credit rating without a history of County Court Judgments or bankruptcy.

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

*Disclaimer: The offers compared on this page are chosen from a range of products whose details Finder has access to track; they don't represent all the products available in the market. Unless indicated otherwise, products are displayed in no particular order or ranking. The terms "best", "top", "cheap" (and variations) are not product ratings and are subject to our terms of use. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.

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