{"id":121813,"date":"2015-12-22T11:38:59","date_gmt":"2015-12-22T00:38:59","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=121813"},"modified":"2025-07-04T17:55:24","modified_gmt":"2025-07-04T16:55:24","slug":"low-interest-personal-loan","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/personal-loans\/low-interest-personal-loan","title":{"rendered":"Compare low-interest personal loans"},"content":{"rendered":"

Please note: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.<\/p>

Late repayments can cause you serious money problems. See our debt help<\/a> guides.<\/p><\/div><\/article>

What’s considered a low-interest personal loan?<\/h3>

Market rates fluctuate, yet at the moment, an annual percentage rate (APR) below 10% for a loan would generally be deemed as a “low rate.” Essentially, this functions like any other personal loan, where you borrow money to cover expenses and repay it with interest and fees. The main difference is that they tend to cost less than your average personal loan, thanks to the low interest rate.<\/p>

Rates vary depending on the loan amount and term you’re after \u2014 lenders can’t make as much profit as they might like from, say, a \u00a32,000 loan<\/a> over one year with an APR of 6%.<\/p>

To qualify for a low-interest loan from most traditional lenders, you typically need to have a high credit score<\/a> and a strong financial history. <\/p>

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<\/a> or borrow from credit unions or peer-to-peer lenders, which tend to offer lower rates than other direct lenders.<\/p>

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\n \n \n \n \n <\/svg>\n <\/span>\n Who gets the lowest rates?<\/span>\n <\/h4>\n
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You might think that all you need to get that 6% APR is a reasonably good credit score, but very few people qualify for the most competitive lenders’ lowest rates.<\/p>

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 who probably doesn’t need a loan. The average interest rate for people with excellent credit is actually just around 9%.<\/p>\n <\/div>\n <\/div>\n<\/div>\n

How does applying for a low-interest personal loan work?<\/h3>

If you find a personal loan you\u2019re 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.<\/p>

After you submit your application, an underwriter (or underwriting software) reviews your file and pulls a hard credit check \u2014 which causes 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.<\/p>

If you\u2019re approved for a personal loan, the money is transferred into your bank account electronically. You then have to make repayments monthly until your loan is paid off.<\/p>

Things to consider besides interest<\/h3>

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:<\/p>